Bitcoin and Litecoin in Messy Weekend Consolidations

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Bitcoin and Litecoin in Messy Weekend Consolidations

Last week, virtual currencies bitcoin and litecoin fell but stalled at the end of the week. Over the weekend, these two cryptocurrencies continued a messy consolidation. Let’s assess their technical conditions and get ready for the breakout.

Bitcoin (BTCUSD) 1H Chart 12/15
bitcoin 1h chart 12/15
(click to enlarge)

Consolidation: The 1H chart shows a market that has been consolidating since last Wednesday (12/10), after bitcoin fell to 332.50. After that price shot back up to 357, thus setting up a consolidation range. Since then, volatility and volume has subsided as price started to drift slightly lower.

Bullish Attempt: As we get ready for the new week, price was unable to threaten the 332 low, and instead is showing some intra-session strength. Price broke above a falling speedline and the 100- and 50-hour SMAs. This would suggest some more consolidation, with upside risk first toward the 349-351 area, which contains the 200-hour SMA, and a resistance pivot within the consolidation range. We should respect this resistance even though the market has been sideways the last few sessions because the prevailing trend was bearish. Then, a break above 358 might open up last week’s highs around 370-372.

Bearish Pressure: Now, if price falls back below 340, the current bullish attempt would be a failure, and bitcoin should be ready for bearish continuation, first to test the 332.50 low.

Litecoin (LTCUSD) 1H Chart 12/15
litecoin 1h chart 12/13
(click to enlarge)

Consolidation: is in a similar technical development, consolidating after a bearish swing last week. After tagging 3.35 (almost the August-low of 3.33), litecoin consolidated. We can see a range roughly between 3.50 and 3.35, with price in a narrow range in the middle of this range, hugging the 100- and 50-hour SMAs.

Bearish Outlook: If price holds below 3.45, the prevailing downtrend is still in play, with pressure towards the 3.33-3.35 area. Below that, the 3.0 handle, and the 2.21 low on the year will be in sight.

Bullish Correction Outlook: If price however starts holding above 3.40, and pushes above 3.45, it might threaten the 3.50 high. A break above 3.50 then opens up a bullish correction scenario, with the 3.70 high from last week in sight. Because of a prevailing bearish bias, we should probably limit the bullish outlook to resistance around 3.65. This target is also a projection of the width of the range (0.15) above 3.50.

Previous Post by Author: Key Fundamental Factors this Week (12/15-12/19)

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.