ForexMinute.com — Despite the volatile bearish movements in the Bitcoin market, Litecoin has proved to be comparatively less-bearish in the last 48 hours. The price action is still happening within the range we discussed in our Friday’s analysis.
A reason why Litecoin seems a little unaffected from Bitcoin could be the bad fundamentals that surround the latter. Over the past two days, Bitcoin community is found debating over the launch of Bitcoin XT, a fork of the existing Bitcoin protocol. With a huge portion of the community still unsure to go further with the new client, the drop in the demand of the digital currency was inevitable. Litecoin, on the other hand, was comfortable in its own un-forked world.
With that said, we would still be looking at the potential levels through the lens of our intraday breakout strategy. Have a look at the chart to know more:
Litecoin 4H Chart
The 4H BTC-e chart above clearly shows Litecoin in a neutral scenario, for the price is now inline with its 50H SMA, while staying below the 100 and 200H SMAs. The 4H RSI, meanwhile, is now slightly above 50, with its head moving horizontal. The MACD indicator, too is looking neutral, for it is completely submerged in its normal line. All these technical indicators indicate a certain sluggishness in the market, an extension of which could lead to a bias conflict.
But for us — the intraday traders — the focus will remain on the near-term profitable positions to churn out the maximum return. At first, we will be sighting 4.021 fiat as our temporary resistance level, while maintaining our upside hopes on 4.137 as our in-term resistance target. A break above the temporary line will therefore put us on an immediate long towards the in-term level. Meanwhile, our stop loss on this trade would be near 3.901 fiat to have us out of the trade in case of a bias reversal — which is very likely indeed.
Conversely, a run towards the in-term support level near 3.718 seems a little distant, considering the current volatility. We would, therefore, be placing our short position towards 3.835 fiat, a level which has proved its strength in past 48 hours. We have noticed a reasonable buying pressure here. But if invalidated, we will enter a short towards the in-term support while maintaining our stop loss near 3.861 fiat.