ForexMinute.com — The Greece bailout has certainly set the world’s economy on a negative trend; however, it is still fueling up the buying pressure inside the cryptocurrency markets. The optimistic impact can be clearly seen in the prevailing uptrend in Bitcoin value which has surged around 6% within one week. At the same time, Litecoin too is showing a similar optimistic price action.
In over the last 24 hours, the silver cryptocurrency has jumped over 15% in a crazily volatile rally. While the price surely seems pumped up, it has overall brought Litecoin to a strong bullish channel, in addition to some really attractive trading opportunities. Let’s have a look:
Litecoin 4H Chart
The 4H BTC-e chart above shows Litecoin in a strong bullish bias, for the price is trending a way too above the 50, 100 and 200H SMA and the RSI has also rocketed inside an overbought zone. The MACD blue curve meanwhile has deviated above its signal curve, while maintaining its positive bias position. At the point of time, we are waiting for Litecoin establish a definite peak level. Because after that, a sharp correction is inevitable.
As you can see the chart above, we have crossed, what we believed to be our in-term resistance line, 3.407 fiat. But the extreme north-loving volatility has broken this ceiling and is now targeting a new range resistance near 3.760. Incidentally, it is the same area where Litecoin was consolidating sideways, back in December 2013. A further break above this level will validate 3.900 as the primary upside target, with a similar risk towards the 4.000-line.
We would recommend our readers to wait for Litecoin to break the range resistance line, before placing any long position towards the primary upside line. Even if you are entering a trade like such, we would recommend you to place your stop loss near 3.608 fiat to avoid being chopped off in case of a bias reversal.
Conversely, a pullback from the peak will certainly put pressure on 3.452 fiat to maintain the bullish bias. However, in case the correction extends, it would be safe to place a short towards 3.407, which is now acting as the temporary in-term support line. A break below this level would validate 3.136 as the primary downside target. We would recommend to place your stops near 3.407 to exit the market in case the bias gets invalidated.