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Bitcoin Pulls Back; Litecoin Challenges Downtrend Cryptocurrencies bitcoin and litecoin have been bearish in 2014. While bitcoin continues its bearish mode, litecoin is consolidating, with signs of life. Let’s take a look at their charts. Bitcoin (BTCUSD) 4H Chart 10/1 (click to enlarge) The 4H bitcoin chart shows a market that is bearish. 1) The 200-, 100-, and 50-period simple moving averages (SMAs) are sloping down, in bearish alignment, and price is below all of them. 2) The RSI has recently tagged below 30, and still remains below 60, showing maintenance of the bearish momentum. 3) And of course, we can see lower highs and lower lows.
Bitcoin Pulls Back; Litecoin Challenges Downtrend LiveBitcoinNews.Com
Bitcoin Pulls Back; Litecoin Challenges Downtrend LiveBitcoinNews.Com Bitcoin price is now pulling back toward 400, where it would meet the 50-period SMA as well as some previous common lows. If bitcoin is to continue its downtrend, this could be a area of resistance. Also the 4H RSI should hold below 60, if the mode remains bearish in this timeframe. Otherwise, if price pushes above 400, and the RSI above 60, bitcoin could be back in consolidation, though the bullish outlook should stay on the shelf until a break above 450. A break above 450 would clear above the 200-period SMA, and a break above 453 would clear the previous resistance pivot. This would invalidate the 3 bearish technical points stated above, and thus introduce a bullish outlook, especially if the 4H RSI pushes above 70. If bitcoin remains bearish, the next key support will be the 2014-low at 340.
Bitcoin Pulls Back; Litecoin Challenges Downtrend LiveBitcoinNews.Com
(click to enlarge) Litecoin was bearish in 2014 as well, but it has held a low of 3.33 since August. Unlike bitcoin, which continued its decline, litecoin has been consolidating. This week, after showing some signs of bearish continuation, it remained in consolidation as seen in the 4H chart. 1) Price is above the 50-period SMA. 2) The RSI never came down to 30, showing lack of bearish momentum. Now, it missed 70 as well, so there is no bullish momentum. 3) Price failed to breach a recent low around 3.90.
Bitcoin Pulls Back; Litecoin Challenges Downtrend LiveBitcoinNews.Com Litecoin is showing a similar technical development to bitcoin’s in the 1H chart. We can see the rally last week that pushed price above the SMAs, and where the RSI reflected bullish momentum when it popped above 80. Just like bitcoin, these bullish signs are now invalid. However, price is still above a recent low around 3.91. With the 1H RSI showing a bullish divergence in oversold territory, we an anticipate some very short-term pullback. We should expect resistance in the 4.25-4.35 area, which is the previous support, and where the SMAs reside. If price breaks above 4.50, we might continue to have consolidation. Otherwise, price is poised to test and the 3.91 low, and with the prevailing trend intact, it should break lower. This bearish continuation scenario would maintain pressure on the 3.33 August low, and then the 2.21 low on the year. Previous Post by Author: Bitcoin and Litecoin Fading a Price Bottom Attempt
Fan Yang Fan Yang graduated from the University of Michigan with a Bachelors in Economics. He started his trading in 2006 after joining CMS Forex, a currency broker and became their Chief Currency Analyst. In 2010, he attained his Chartered Market Technician designation. Through the years, Fan has developed trading techniques that can be applied in stocks, currencies, and almost any asset class with liquidity. Although he specializes in technical analysis he uses fundamental factors to help guide his trade ideas before using the technical tools to plan out the trades. More Posts - Website