Bitcoin Breakout Hits Stumbling Block

Bitcoin broke out above the top of its range at $340 dollars last week and proceeded to rally almost $40 dollars to a high of $379.80. Here the gains topped however as BTC hit a previous congestion area. Litecoin again followed bitcoin, first higher, then lower. But let’s start with big brother first.

Bitcoin Breakout Hits $380 Dollars

The bitcoin breakout above $340 hit a high of $379.80 before falling back. The correction that followed lead to a low of $353 flat. We are currently quoted at $360.73, close to the lows for the day.

BTCUSDD1-dec1

While BTC/USD made significant headway this week, we haven’t breached the important breakout levels thus we are not in rally mode yet. The threshold for that currently stands at $380 dollars per coin. A decisive breakout above this previous congestion will start a new BTC rally. Higher up more resistance can be found at the $400 round figure, followed by another round figure at $450 and this year’s high on FxOpen at $459.

On the other side, the first major support level is the top of the range we just broke out from, around $340-$350 dollars. Resistance becomes support and this previous lid on prices may now turn to support them on the way down. Lower still the low of the range is set at the round $300 figure. This is another potential support level. But to start a new downtrend, the bears will need to push BTC below $290 dollars per coin.

Litecoin Follows Bitcoin

In the past seven days, alternative cryptocurrency Litecoin rallied and fell on bitcoin’s orders. First we saw LTC/USD breakout above the high of its range at $3.26, followed by a 14 percent rally to a high of $3.74. From here prices retraced to a low of $3.35. We are currently trading at $3.44 on FxOpen.

LTCUSDH4-dec1

What’s next for Litecoin? A decisive breakout beyond the $3.74 high (not just a brief spike above it) may start a new LTC rally. Notable resistance levels above here include the $4 and $4.50 round figures, followed by the November high for Litecoin at $4.85 dollars.

On the lower end things haven’t changed since last week. The figure to watch is still the $2.88 low. A break of this level would start a new downtrend. Important support levels below include $2.70 and $2.50 dollars per coin, followed by the January swing high at $2.40 dollars. Further down, the support area from $2 to $2.05 is another important level.

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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