Bitcoin Bounces After Large Losses

A lot has happened since our last bitcoin update. Last week BTC/USD was (barely) holding onto the $10,000 mark but by Tuesday we dropped to a low of $5,980 dollars. Litecoin saw lows at $105 dollars before a bitcoin-led bounce took it out of the doldrums.

Bitcoin Drops by 40 Percent in 6 Days

The news about the Tether subpoena last week shook market confidence. Bitcoin prices dropped by 40 percent in 6 days to hit a low of $5,980 dollars. Here we got somewhat of a rally to $8,468 dollars but there is no certainty that this will be more then a ‘dead cat’ bounce. We are quoted at $7,568 dollars right now, much below the $19,850 all-time high.

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The downtrend on the daily charts continues. To end it the bulls will need to push prices above $12,000 dollars. A new uptrend requires a breakout above the $12,982 swing high. Support on the way down can be found at the most recent swing low at $5,980 followed by the $5,000 round figure. This is an important milestone for BTC/USD as well as a previous major resistance. A clear break of this level could lead to more BTC losses. On the longer-term weekly charts bitcoin is range-bound. The monthly charts are still keeping the bullish bias.

Litecoin Drops to $105 Dollars

Litecoin again followed BTC/USD lower as it broke the $10,000 handle. The coin dropped from $161 dollars all the way down to $106.20 during the initial dump, a loss of 34 percent. The bounce then took LTC/USD all the way to $173.25 dollars as news emerged about Litepay, a litecoin payment processor.

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However as we can see on the chart above those gains couldn’t be sustained as the bears used the high prices to sell into support. The second push lower double-bottomed nearly at the same spot, this time hitting $105.55 dollars. This area along with the $100 round figure remain as strong support. A decisive break of $100 dollars could lead to further LTC losses.

Litecoin remains in a downtrend on the daily charts. On the upside the bulls need a break above $181 dollars to end the downtrend. But a new rally requires a move above the $214 swing high as well. On the weekly charts LTC/USD remains in rally mode but a move below $100 dollars could change that. On the monthlies litecoin is keeping the bullish bias.

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Petar Kotevski

Petar is a forex trader and writer with 9 years of experience in financial markets. He has been following bitcoin since 2010. A year ago, as the BTC market matured, he started getting more involved by writing articles on bitcoin and other alternative currencies.

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