ForexMinute.com — For the past few days, Litecoin was trending strictly within a constrained trading range, thanks to the absence of enough buying and selling signals. However, the price recently displayed some heavy downside pressures, soon upon Bitcoin’s attempt to break below its own in-term support level. Litecoin, like most of the time, seemed to have followed the Bitcoin’s price action, as it too slipped drastically today. Let’s check it further:
Litecoin 4H Chart
The 4H BTC-e chart above shows a change is market sentiment. In over the last 24 hours, heavy selling signals have sent Litecoin below its 50-H SMA, while it continues to stay above the 100 and 200H SMAs. In the meantime, we can also notice RSI’s fall below 40, as well as MACD indicator’s slippage towards the normal line — both indicating a stronger near-term bearish bias in the Litecoin market.
We are therefore looking hopefully at 2.694 fiat, which — being the range support — could hold the price from falling into a serious bearish channel. If it happens so, the drop would validate 2.496 as the primary downside target — opening some decent short positions to trade on. We would however recommend you to place such a risky trade; and even then if you’d like to go ahead, just place your stop near 2.795 in case the corrective trend appears.
Conversely, a run towards the temporary resistance line near 2.973 would bring in-term resistance level near 3.136 back in sight. We would therefore be looking to place a long towards the temp level, by keeping our stop loss near 2.876 to avoid being chopped off in case of bias reversal. A jump above the temp line, and we would enter a long towards the in-term line.