ForexMinute.com — With Bitcoin maintaining its sluggishness, its closest cryptocurrency Litecoin is also exhibiting a similar price action ever since the price corrected from 3.226 fiat. With no upside pressure to sight for, and downside levels growing tires, the silver cryptocurrency is close enough to face a major sell-off. Look at the following chart to understand how:
Litecoin 4H Chart
The 4H BTC-e chart above displays Litecoin in a critical zone, where its price is trending below the 50, 100 and 200H SMAs and the 4H RSI is also inside a selling region, near 45. On the other side the MACD indicator is also sluggish in its pace, and is currently lying just below the normal line, maintaining its overall negative bias. All these technical indicators point to a strong bearish sentiment but, at the same time, indicate a near-term bias conflict due to current congested range.
The current absence of trading volume can influence weak hands to sell-off their holdings to introduce a little price action in the market. We would indeed be excusing ourselves from placing any bets, until and unless either of the risk levels are broken.
As you can see, we are current in midst of a tight range, with 3.902 serving as the in-term resistance and 3.635 as the in-term support. A break below 3.635 would put us shot towards 3.510 fiat, our medium-term downside risk. A further break would validate 3.226 as our primary downside target. On these trades, our stop loss will be near 3.688 fiat.
Looking at other way, a run above the 3.902 fiat would simply open our long position towards the 200SMA trendline, currently near 4.020 fiat. A further upside momentum will have our primary target shifted to 4.268 fiat. On these trades, we would be placing our stop loss near 3.688 to avoid being chopped off in case of a bias reversal.