ForexMinute.com — The dynamics inside the Litecoin market is changing with each passing moment, thanks to a wonderfully surplus surge its value has seen in past few days. A part of this visibly mad pump is credited to Bitcoin, whose very own market is demonstrating a bullish show, possibly in the wake of Europe’s decision to exit Greece.
There are chances that upon been kicked out from the European economy, Greece will be embracing a decentralized digital currency (Bitcoin, no Bitcoin, who knows!). It is possible that Greeks are simply figuring out a plan for themselves and are boarding the Bitcoin’s train in large numbers.
Whatever the theory may look like, it certainly is helping the entire altcoin market, a major chunk of which belongs to Litecoin. But there are also chances that a pump of such kind meets an equally irresistible dump. In our today’s analysis, we will be therefore reminding you of the downside levels to watch out during the current trading session. Watch this chart for further elaboration:
Litecoin 4H Chart
The 4H BTC-e chart above displays Litecoin in a strong bullish bias, where price is clearly trending above its near and long-term SMAs and the RSI has also gone inside an overbought territory. Without a doubt, there is some correction expected once Litecoin establishes a peak. But in the meantime, we will have to watch out for the levels to exit our position in case such a price action appears.
Going with the bullish bias, we will first consider 3.445 as our current peak target, last tested in December 2014. A long entry towards this level would only make sense if Litecoin crosses above 3.000 (it is attempting at press time). A further break above the said peak level will validate 3.713 as its next upside target, means some more attractive long opportunities. In the meantime, make sure to place your stop loss near 2.907 to avoid being chopped off in case of bias reversal.
Conversely, a run towards the in-term support 2.907 will instantly validate 2.788 as the primary downside target. A further break will bring 2.597 back in sight. We will still ask you all to place your stop loss near 2.999 in case the price rebounds from the support and invalidate your short positions.