The altcoin space has been in the spotlight as late, with a number of the mainstream media organisations jumping on the litecoin bandwagon and releasing in depth reports concerning the “silver” cryptocurrency’s potential as either a successor or a supportive asset of bitcoin. The digital currency enthusiasts among us will be well aware what happened the last time this sort of hype took hold. However, price action in the LTCUSD is yet to reflect the positive media releases, likely as a result of the recent negative attention surrounding bitcoin and its Chinese troubles. So, how can you profit from the current action while preparing for a potential rally? Here’s what you need to know.
The LTCUSD mirrored the action seen in the BTCUSD heading into the weekend, with an initial rally reversing to a sharp decline on Friday. The pair then traded within a relatively tight $0.70-$1.00 range throughout Saturday and Sunday, before a downside break found support at 9.6787 to bring us to current action.
As with the BTCUSD, a range strategy may be the order of the day on Monday. Look to enter long at aforementioned support with a target of in term resistance at 10.3116, and enter short at this resistance with a target of range support. Both levels offer a nice way to stay on top of your risk, with a stop loss above resistance on your range shorts and below support on your range longs.
Although the current technical bias looks short, as mentioned in the introduction to this piece, there could be a sharp, fundamentally driven rally just around the corner. To ensure you are in the rally keep a close eye on action around in term resistance. A close above 10.3116 could signal further upside. For the more conservative trader, look for a failed retest after such a close to add strength to the bias.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com