Bitcoin Breaks Out, Litecoin Fails at Resistance

The two major crypto-currencies Bitcoin and Litecoin clocked some nice gains this week. Bitcoin is up by $26 dollars or 4.5 percent compared to last Tuesday. Meanwhile its little brother Litecoin is up by 15 cents or just under 4 percent.

Bitcoin Breaks Out

Bitcoin surged on Sunday, breaking past the $600 round figure. The reason for the rise is yet unclear although ex-post facto some tried to tie the move to the G20 meeting held during the weekend. Another option is Bitfinex-related speculative buying. Volume more then doubled on this exchange during the short rally. No news have been announced as of yet by the troubled exchange.

BTCUSDH1-sept6

Regardless of the reason, we’re now in a tentative short-term uptrend. To end it, the bears will have to push prices below the $567 swing low. Further down we have a strong level of support at $550 dollars followed by the round $500 dollars figure.

On the upside, the first weak resistance is Sundays high at $613 dollars per coin. A break above here would confirm that the Sunday surge wasn’t just a one-day wonder. A much stronger resistance level can be found at the $650 mark. This is followed by more resistance levels at $670, $687 and $700 dollars per coin. For bitcoin now all three trends (short, medium and long-term) are bullish.

Litecoin Fails at $4 Dollars Again

Alternative cryptocurrency Litecoin failed to break above the $4 dollars mark a second time. Attempt number two took place right as big brother bitcoin surged on Sunday. Litecoin rose to a high of $4.018 but here the move stopped and we got a retracement to $3.91 dollars. We’re now quoted at $3.93 dollars per coin.

LTCUSDH4-sept6

As we said last week, we’re looking for a decisive break of the $4 dollars level. The brief and shallow pierce that happened on Sunday doesn’t qualify, thus LTC/USD remains neutral. A move above $4 dollars would start a new short-term uptrend. Resistance levels above here can be found at the $4.07 swing high, followed by $4.15. Higher up we find a resistance area from $4.43 to $4.52 per coin. A clearing of this area could intensify the gains for LTC.

On the lower end the bears need a break of the $3.50 level to restart the downtrend. Below here we have support at the $3.22 lows hit in the aftermath of the Bitfinex hack. More levels can be found below at the $3 round figure, followed by this year’s low for Litecoin at $2.89 dollars. Lower still we have the twelve-month low near $2.50 dollars per coin. A breakdown below here could lead to more losses.

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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