ForexMinute.com — After recovering smoothly ahead of the weekend, the Litecoin value once again found itself trapped in a humongous selling pressure, which resulted in a straight crash. A part of this gravity-loving price action could be credited to Bitcoin, whose value also fell by 5-8% in over the last 48 hours.
Nevertheless, our intraday breakout strategy helped us exiting the trade right when the downside momentum tested our stop loss. As it went on and on, we excused ourselves from entering any position and waited for Litecoin to establish a new bottom. And as we are now in another day of trading, we are surely seeing some weak bullish corrections, formed within a new range. What are these levels? Lets check out:
Litecoin 4H Chart
The 4H BTC-e chart above shows price in the midst of a new range, where 3.692 fiat is serving as the new in-term support, and 3.973 fiat as the new in-term resistance level. For today, we are expecting price to stay within this range, considering the correction will continue further. In the meantime, we have drawn a threshold line (the pink one) between the said levels, which will gonna act as our near-term short/long position, depending on the direction to where price is moving.
At first, we will first be looking for Litecoin to break above the in-term resistance level to validate 4.031 fiat as our medium-term upside target. A further correction would put us long towards 4.137 fiat, our primary upside target. On these trades, our stop loss will stay near 3.9073 fiat to help us exit the trades in the event of a bias reversal.
Looking at the other way around, a run below the threshold line would have us put a short towards the in-term support. On this trade, our stop loss will be near 3.868 fiat. We will excuse ourselves from placing any further short trades as of this moment, considering the prevailing downside momentum that has seemingly weakened the support levels that come ahead.