ForexMinute.com — As we expected in our previous analysis, selling pressure did arrive back to the Litecoin market when the price hinted to lose its prevailing upside momentum near the current in-term resistance line, near 3.192. A part of this pullback appeared under the influence of Bitcoin whose own price action displayed some near-term corrections in past 24 hours.
But despite of the corrections in both the markets, there was certainly a strong support level to hold the price from falling into a bearish channel. Litecoin fell, but bounced back with an equal pace after establishing a strong in-term support near 2.826 fiat.
Litecoin is therefore trending between the 2.826-3.192 range, the levels we will be sighting today.
Litecoin 4H Chart
The 4H BTC-e chart displays Litecoin in a strong bullish bias, for the price is clearly trending above its near and long period SMAs. The 4H RSI meanwhile is also trending inside an overbought zone, going horizontal with a little hint to tease the 75-mark. The MACD indicator is also inside a positive territory, indicating a strong buying pressure in the market for next few hours.
We are therefore hoping the price to keep teasing the in-term resistance line near 3.192 for now. A break above this level instantly validates 3.702 as the primary upside target. We recommend you place your long positions only when price seems to have broken the in-term resistance level, otherwise it would be okay to just wait, considering the current volatility inside the Litecoin market. Additionally, make sure to place your stop loss near 3.125 fiat to ensure a timely exit in case of corrective price action.
Conversely, a run towards the in-term support line near 2.826 instantly opens some decent short positions. Also, a break below this level validates 2.491 as the primary downside target, meaning some attractive but risky short positions as well. While placing both the trades, we would therefore recommend to place your stop at 2.896 to avoid being chopped off in case of a bias reversal.