ForexMinute.com — After a wonderful rally and moderate consolidation period, Litecoin ultimately gave to an uninvited bearish trap. In over the last 24 hours, the price fell around 2.5% amid a very strong selling pressure, a part of which could be incited from the crash in Bitcoin markets. Likewise its locomotive, Litecoin also failed to establish any quick correction, and therefore validated some further downside levels. Let’s have a look:
Litecoin 4H Chart
The 4H BTC-e chart shows Litecoin in as strong bearish channel, thanks to its sustenance below the 50-, 100-, and 200-H SMAs. The downside pressure gets further proved with the 4H RSI and MACD indicators, both of which are trending inside a selling territory — awaiting corrections.
As the pressure begins to grow, we are clearly targeting 1.562 as the current in-term support level, while the in-term resistance is held somewhere near 1.678. With Litecoin hinting to extend its downward trend, it is likely to open some decent short opportunities below the in-term support level. In case 1.562 is broken to the downside, placing your short position towards the primary downside target near 1.530 will fruit some decent profits. However, it would be advisable to place your stop loss near 1.680 in case the correction appears. It will ensure a timely exit with a minimal loss.
Conversely, a break above 1.678 will validate 1.754 as the primary upside target. Therefore, entering a long position near the in-term resistance level will open good trading opportunities towards the aforementioned primary level, with a further upside risk towards 1.815. However, it is recommended to place your stop loss near 1.670 in case the upside bias gets invalidated.