As is so often the case, the altcoin market is following the general trend of its bitcoin counterpart. The volatility of the past few weeks has been replaced with relative stability across the altcoin space, with litecoin, namecoin and dogecoin all trading within relatively tight ranges. Sometimes traders look for intraday volatility to offer up profits from the financial markets, but with increased volatility comes increased risk. With this in mind, a stable, ranging market (such as that of the LTCUSD over the past couple of days) can present traders with a reduced risk opportunity. Simply put, such a strategy involves following price action and entering on the breaks of key historic levels.
So, let’s take a quick look at recent action to get an idea of the levels to watch.
Having topped at 14.235 during the middle of last week, the LTCUSD declined sharply to reach fresh weekly lows at 11.425. The pair found support and corrected over the weekend to resistance at 12.991. This level now serves as in term range resistance, and action over the last couple of days has validated 12.008 as in term range support.
A break above aforementioned resistance would offer up a medium term bullish technical bias, with an initial upside target at April 17 resistance at 13.818. A close above this level would validate ten day highs at 14.235 as a secondary target.
Conversely, a break below in term range support would offer up a bearish intraday technical bias, and hint at further downside as the day matures. In this instance, look to April 19 support at 11.425 as an initial downside target. A break below this level would validate 10.952 as a secondary downside target.
As with today’s bitcoin trade plan, manage your risk with tight stops just the other side of your entry. Just because the market is relatively stable at present does not mean it will remain so, meaning careful control of your potential exposure is paramount.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com