ForexMinute.com — It was like going for a nine hour nap, only to come back and see Litecoin’s prevailing upside momentum on some adrenaline — breaking each and every upside level; even fool out with the January’s peak near 2.867. Its an exciting pump out there in the Litecoin market, literally.
Let’s have an elaborated view:
Litecoin 4H Chart
The 4H BTC-e chart above undoubtedly displays Litecoin in a very strong bearish bias. The price is clearly located a way too above its 50, 100 and 200H SMAs, and the RSI has rocketed too much above the buying threshold — near 90. The MACD blue curve is also trading a way too above the normal line and saffron signal curve. But what after this? Will the volatile uptrend continue further or will be met with an equally crazy downside correction? The answer is nowhere to be seen, frankly speaking.
It would be safe to say that Litecoin has risen only because Bitcoin is showing a similar price action in its charts. Traders do not have a clue why Bitcoin is on such a buying spree and are simply speculating conspiracies. The traders are sharp and mouth watering at the same time, but we would still ask our readers to avoid play a much too long position, or a way too short towards the downside levels.
Which brings us to the levels we’ll be keeping our eye on for today. As you can see the chart above, we have refrained ourselves from drawing any upside levels for now, for the price is showing too much volatility at this point of time and might invalidate our analysis for the long positions. We will however suggest you to keep placing near-term long position towards the possible risk levels like 2.525, 2.550, 2.575 and so on. Meanwhile, just keep you stop near 2.500 to avoid any chopping upon a bias reversal. Because it can turn ugly if the price attempts a correction.
And this is where the short opportunities arise. If you notice a correction towards the downside levels, the first target to watch out for is 2.430, the higher high during the January 25th trading session. A break below this level will instantly validate the next in-term support near 2.287.
Make sure to place you stop losses near 2.500 in case of short positions as well.