Yesterday bitcoin made another attempt to break out and end the current downtrend. It was unsuccessful and the coin proceeded to drop by $346 dollars from the highs. Litecoin followed big brother lower declining by 6 percent today.
Bitcoin Drops From Highs
Bitcoin hit a high of $6,806 yesterday, only $34 dollars away from the previous swing high at $6,840 dollars. As noted in our last article, we needed a breakout above this level to end the downtrend. As that didn’t occur, BTC/USD remains in a downtrend on the daily charts.
The $6,840 dollars figure remains to be the important swing high. A breakout above it would both end the downtrend and trigger a new uptrend in prices. We are currently quoted at $6,460 dollars, down 3.6 percent on the day.
Below there’s some support at this year’s low of $5,766 dollars. A stronger level however can be found at the $5,000 round figure. Besides being a major round figure, $5,000 was also a notable swing high last year that stalled the bubble by one month. It’s unlikely that this support will be broken on the first try. When and if $5,000 breaks the losses could intensify.
On the upside there’s strong resistance at $6,840 dollars followed by a weaker level at the previous swing low of $7,046 dollars. Resistance higher up can be found at the $7,775 swing high. This is followed by more levels at $8,590 and 8,880 dollars. The $10,000 round figure is another notable resistance level. A breakout above could lead to more gains. There’s no change in trend on the longer-term charts, the weeklies are in a downtrend while the monthlies are still looking bullish.
Litecoin Follows BTC Lower
As usual litecoin, as most of the crypto market, followed BTC lower. The crypto is trading at $76.20 dollars at the moment, down by $4.80 today or around 6 percent.
Despite the losses LTC/USD remains in a range as you can see on the chart below. We need a breakout above $101.49 or below $72.50 to start a new trend. As things stand right now a break to the downside is more likely. Below $72.50 the next major level of support is around $50 dollars. Here we have the 2013 high at $48.40 dollars coupled with the $50 round figure. A clean break below $48.40 could lead to more losses below. This doesn’t mean that the ‘coast is clear’ for shorts between $72.50 and $50 dollars as some support is likely to emerge in this 30 percent gap.
On the upside after $101.49 there’s strong resistance in the $105 – $109 area. This was the low in 2018 for over five months until the June breakdown. A clearing of this resistance area could lead to more gains. On the longer-term charts litecoin is bearish on the weeklies but bullish on the monthlies.
MetaTrader BTC trading on FXOpen Crypto accounts.