ForexMinute.com — After dipping violently, Litecoin finally attempted a brief bullish correction in last 24 hours — surging from an intraday low near 2.900 fiat to intraday peak near 3.050 fiat. The price action appeared well within the range we drew in our previous analysis, and therefore offered enough range trade opportunities to us.
As we now enter another day of trading — with Asian session in play and European heading towards a start — we can expect price to remain within the same range (with 2.921 fiat as in-term support and 3.050 as in-term resistance). Let’s check out what our strategy will be for today:
Litecoin 4H Chart
As you can see the 4H BTC-e chart, Litecoin is currently trending below its 50H SMA. The 4H RSI meanwhile has surged above 50, indicating a favorable buying scenario. The MACD indicator, on the other hand, is still maintaining its negative bias, but has surged above its signal wave.
Going by the technical indicators, we can smell a neutral bias. However, based on Litecoin’s historical patterns, we can expect price to attempt bearish corrections. Therefore, our first priority would be place our risk assessment strategies at places to avoid any funny volatility.
At first, we will wait for Litecoin to cross above in-term resistance to validate 3.062 fiat as our medium-term upside target. The said target also falls in line with the 50-H SMA, which we believe must be broken in order to establish a near-term bullish bias in the market. While the chances of it happening is likely, we will still keep our shoelaces tight by maintaining a stop loss near 3.039 fiat to exit the market in the event of bias reversal.
Looking the other way, a pullback from in-term resistance would put our trade immediately towards 2.988 fiat, our temporary support level. If we get to break this level, we will enter a similar short trade towards 2.921 fiat while keeping our stops near 2.995 fiat.