The volatility looks to have returned to the cryptocurrency space over the last 24 hours, with the top three digital coins by market capitalization all taking sharp dips during Thursday evening and Friday morning. The volatility offers up the opportunity to profit from the market – here’s what you need to know.
First, let’s do a quick recap of the action that brought us to where we are today. Much has been made of the relative stability of the cryptocurrency world as late, and the LTCUSD is no exception. The pair has traded steadily downwards since last weekend, and look to be heading into the close of the week in a similar fashion. However, an upside break on Thursday offered a bullish technical bias, which a reversal quickly invalidated. A break back into the channel and out of channel support switched sentiment, and today’s technical bias is bearish.
So what are the levels to watch?
The downside break found support at 10.513, so expect a medium term correction to offer a nice pullback entry. Look for a correction to 10.952, and a failed retest of this level to validate current support as an initial downside target. If price can close below this level (with or without a correction), it would offer up 9.9354 as a secondary target and would be the first time the pair has been in single figures since the beginning of April.
As mentioned in today’s bitcoin trade plan, the recent action has demonstrated the pace with which the cryptocurrency market can reverse. Keep this in mind when entering trades. Buying or selling the LTCUSD exposes you to the possibility of a quick sentiment shift, and the losses that this could incur. The only real way to protect your capital is through the use of stop losses, the parameters for which the levels mentioned above outline.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com