ForexMinute.com — For last few days, Litecoin was trending sideways within a narrow trading parameter. The volatility was, meanwhile, low and the price was in a state of bias conflict. We had feared in our previous analysis that such a price action could inspire heavy selling; and thereby recommended our readers with certain risk levels to exit the market in case of a breakout.
And as we see, the bearish momentum that we encountered for most of this week stretched its legs a further, and Litecoin price fell below its key support levels. We are now heading towards the US session; let’s check which levels we will be keeping our eyes on for today.
Litecoin 4H Chart
The 4H BTC-e chart displays Bitcoin in a strong bearish bias, for the price has clearly fallen below its 50, 100 and 200H SMAs and the RSI, too, has dipped below 30. The MACD indicator meanwhile has stretched inside negative bias as well. All these technical indicator points towards a strong selling sentiment, awaiting some sort of upside correction upon establishing a low.
And as you can see as well, Litecoin is currently testing its new in-term support level near 3.226 fiat. If we get a further bearish momentum, we are looking at price targeting 2.660 fiat as its primary downside level. We will be looking towards placing a short towards it, while maintaining our stop loss near 3.454 fiat.
Conversely, a corrective phase will validate 3.717 as our in-term resistance level. If price is able to extend its retracement — by jumping above the said level — then we will be placing a long position towards 4.272, our primary upside bias. In this trade, our stop loss will be the same — 3.454 fiat — to ensure a positive reward profile.