The answer to this question directly depends on how far Bitcoin can go, and hence the entire market with it. Unfortunately, cryptocurrencies, especially altcoins, are bitcoin dependent more than before.
Yes, the altcoins highly correlate with bitcoin, and that includes Litecoin, so Litecoin will have to differentiate itself with confidential transactions and other unique features. Because on-chain transactions are much cheaper on Litecoin versus bitcoin, in my view Litecoin will always have a use case. Some people will prefer to do on-chain transactions.