Bitcoin entered a new downtrend last week after breaking the important $400 figure on Friday. Prices subsequently fell by $50 dollars, or just over 12 percent, to a new monthly low of $349.82. Its little brother Litecoin followed the move lower with losses totaling 13.5 percent. As usual we’ll start with bitcoin first.
Bitcoin Breaks $400 Dollars
After trading in a range for close to a month BTC/USD finally made its move. Prices barreled past the important $400 figure on Friday, closing at $386 dollars per coin. The losses continued for another day on Saturday as bitcoin hit a new one-month low at $349 dollars. We have since bounced back somewhat to $386.33 dollars.
Despite the gains during the past few days, the move higher is likely a retracement within a larger downtrend. The first resistance above here can be found at $400 dollars, the former support, now turned resistance. But while a daily close above $400 should worry the bulls, the trend lower will technically remain in place until we get a decisive break above the $450 level. Higher up, a move beyond $470 dollars per coin would start a new uptrend in prices.
On the lower end, the first important support can be found at the Saturday low near $350 dollars. A break below here could extend the losses towards $340 and $310 dollars per coin. More support on the way down can be found near the $300 round figure.
Litecoin Enters Downtrend
Prompted by Bitcoin’s losses, Litecoin entered a new downtrend as well. Prices broke the support at $3.35 dollars on Friday and by Saturday we were down over 13 percent to $2.89 dollars per coin. This was a new two-month low for the cryptocurrency. Similarly to bitcoin, LTC/USD bounced back from the lows and is currently quoted at $3.03 dollars.
The bounce near $2.88 shouldn’t be a surprise to our readers. In our previous LTC update, we noted this figure as potential support. This was the November low for Litecoin. The October low wasn’t far off at $2.92 dollars per coin. A clearing of this support area could open the way for more losses towards $2.70 and $2.50 dollars. More support on the way down can be found at the January swing high at $2.40 dollars, followed by a strong support area near $2-$2.10 dollars per coin.
On the upside, while a move back above the former support at $3.35 should worry the bears, the trend lower will remain in place until the $3.65 dollars swing high is taken out. A decisive breakout above this level could also start a LTC new uptrend.