ForexMinute.com — A low volatility weekend kept Litecoin in between a predefined pattern, with price consolidating sideways without hitting a proper buying/selling pressure in the market. A part of this action was influenced from Bitcoin, whose own price was consolidating within strict parameters from last two days. Litecoin, as it seems, simply tailed it. Let’s have a detailed look:
Litecoin 4H Chart
As we can see the 4H BTC-e chart above, Litecoin is in the midst of a moderate widened trading range, currently sighting 2.694 as its in-term support, and 3.136 as its in-term resistance level. The bias meanwhile continues to be bullish, for the price is clearly trending above its 50, 100 and 200H SMA; and the RSI is trending sideways between 55 and 60. The MACD indicator meanwhile has dipped below the signal curve, but continues to stay above the normal line.
At this point of time, we are clearly awaiting a breakout towards either levels, something which we have seen in past as well. At first, Litecoin will be clearly attempting to break above the in-term resistance level near 3.136 to establish 3.424 as the primary upside target. Despite being an attractive long position, we would urge traders to avoid entering their position while the price is below the in-term line. This is due to strong pullback pressure the level has demonstrated in past few days. And even if you do place a long towards the primary target, make sure to place your stop loss a little below your entry position to ensure a timely exit with a little loss, in case the bias gets invalidated.
Conversely, a run towards the in-term support near 2.694 wouldn’t be that easy, as the road before that already has one strong temporary support line — near 2.779, which would open some decent short opportunities for traders. Only a break below this line would bring the in-term support back in sight, which would further validate 2.496 as its primary downside target. It would be ideal to place your stop loss near 2.846 to avoid being chopped off if the bias is reversed.