The U.S. Securities and Exchange Commission (SEC) has delayed its decision on Canary Capital’s proposed Litecoin (LTC) exchange-traded fund (ETF), citing the need for public comments regarding fraud protection and compliance. This triggered a sharp 7% drop in LTC’s price, now hovering around $81.81 as of May 6, 2025, as shown in the chart.
SEC Seeks Public Feedback on ETF Rules
The SEC published a notice inviting the public to comment on whether the proposed rule change would adequately prevent fraud and manipulation. It asked whether the ETF raises any concerns not previously addressed in earlier applications:
“The Commission seeks and encourages interested persons to provide comments on the proposed rule change. The Commission asks that commenters address the sufficiency of [whether] the proposal… is designed to prevent fraudulent and manipulative acts and practices or raises any new or novel concerns not previously contemplated by the Commission.”
This move does not confirm rejection. The SEC has used similar comment periods for other altcoin ETF proposals, including one related to Litecoin in February 2025. Still, traders saw the delay as a bearish signal and reacted accordingly. ETF analyst James Seyffarth had earlier predicted the delay but did not comment on the significance of the SEC’s request for public input. While delays are common and may reflect procedural caution, market sentiment remains sensitive.
The chart shows consistent fluctuations between March and April, with no sustained recovery in confidence. Even brief spikes above 40% were short-lived. The latest drop confirms growing skepticism about a July 31 approval deadline. Despite this, the year-end (December 31) contract still sees steady betting activity, suggesting that some traders expect eventual approval later in 2025—even if Q2 hopes are fading fast. With over a dozen altcoin ETF applications awaiting decisions, including for Ethereum and Solana, the SEC’s cautious approach continues to drive short-term price moves across the sector.
Litecoin Shows Bullish Pennant Pattern With Possible Breakout
Meanwhile, starting from mid-2017 to May 2025, the monthly candlestick chart of Litecoin (LTCUSD) displays a long-term consolidation forming a bullish pennant pattern. This structure appears after a sharp upward move, followed by converging trendlines, and often signals a continuation of the previous bullish trend.
In this case, Litecoin’s price has been compressing within narrowing support and resistance lines since the 2018 peak. The upper trendline caps lower highs, while the base gradually slopes upward. This pattern suggests buyers are building momentum. The Relative Strength Index (RSI), currently at 47.81, remains below the neutral 50 level, showing neutral-to-slightly-bearish momentum. However, if the price breaks above the upper resistance with volume, this monthly bullish pennant could trigger a major upside move.
The chart uses a 50-month Exponential Moving Average (EMA), currently at $88.97, which also serves as a long-term trend guide. Litecoin trades slightly below this line, meaning a breakout above both the trendline and EMA would strengthen the bullish case.