ForexMinute.com — The technical glitch inside the Bitcoin network has really led its user base towards the next-best cryptocurrencies. Quite justifiably, Litecoin is encountering some really strong upside momentum due to this unannounced transaction traffic. In over the last 24 hours, the silver coin has surged by yet another 10% while Bitcoin is sluggishly trending sideways.
So how the current price action in Litecoin market is hoping to play out? And what are our risk levels for today? Let’s check out in the analysis below:
Litecoin 4H Chart
The 4H BTC-e chart displays Litecoin in a very strong bullish bias, for its price is still rising above the 50, 100 and 200H SMAs and the RSI is also located inside an overbought zone, awaiting a near-term bearish correction. The MACD curve is also inside a positive bias and is trending a way too above its signal curve. All these technical indicators point to more buying, but with a twist.
We should not forget that all these surging is nothing but a temporary deviation from Bitcoin. So a volatile bearish correction is equally likely at these point of times. Litecoin, as you can see in the chart above, is still targeting September’s 2014 peak level 8.924 fiat as its in-term resistance line, while the in-term support has moved up near the 7.736 fiat. Price, in ideal case, is expected to bounce between these levels.
We will first be looking to play a long entry towards 8.500, a psychological bet that might play out for decent profit. While our upside target continues to be near 8.924, we would be waiting for price to cross above the 8.5-mark. We will also be placing our stop loss near 8.131 to ensure an overall positive risk reward in case the bias is reversed.
A run down towards the in-term support line near 7.736 will meanwhile look like a cakewalk. The downside corrections are expected to be volatile so we’ll keep our short position reserved towards the aforesaid line, while keeping a stop loss near 8.145 to exit the market in case of a bias invalidation.