The volatility continues to remain high in the cryptocurrency market, with moves worth thousands of pips. Unil last week, the volatility remained to the upside, as the sentiment remained quite bullish, but last week the situation changed.
Litecoin turned bearish as did most cryptos, on rumours that the US would apply a tax on cryptocurrency gains. That turned the crypto market bearish and the fact that it was time for a decent retrace lower to refresh this yer’s massive bullish trend added to the bearish momentum.
Bitcoin fell to $47,000 last night according to my broker but it has reversed higher, trading just above $54,000 now, which means a $7,000 climb. LITECOIN has increased to $243 from the $207 lows last week.
The 200 SMA (purple) held as support for Litecoin despite being pierced a couple of times. The bounce came after the pin candlestick which is a bullish reversing signal. Although, Litecoin is facing obstacles above at around $250 now.
The 50 SMA (yellow) and the 100 SMA (green) have both acted as support on the H4 chart, as shown above. Now they stand at $250, ready to provide resistance on this time-frame chart. The stochastic indicator is overbought now, while the buying pressure has slowed.
Now comes the test for Litecoin; if it moves above the moving averages, then the larger bullish trend will be back on, if it fails, then there will be more pain for us since we are long on LTC/USD and are around 4,000 pips in profit already.