After several weeks of an indecisive price action, Bitcoin has finally entered a downtrend this week. The bigger brother joins Litecoin which has been in a down-spell for over 1 month now.
Bitcoin Enters Downtrend
Bitcoin prices are now in a downtrend. Notice how on the daily chart below BTC finally broke out from that long triangle pattern. We are currently quoted at $596 per coin.
Support below here can be found at $589 followed by $540-$550 on FXOpen. Further down the round figure at $500 is another notable support. The breakout point for the latest major rally at $462 per coin is a major level to watch as well. More levels can be seen in the chart below.
To end the newly started downtrend, prices will have to break $657 on FXOpen ($665 on other exchanges). A new uptrend requires the breakout above $670 ($690 on other exchanges). The longer-run trends for BTC/USD, both weekly and monthly, are still bullish.
From a fundamental perspective, it’s possible that Bitcoin’s recent losses are partially caused by the resurgent Yuan. The USD/CNH fell from $6.68 to $6.62 last week. While this week we’ve seen some retracement, we’re currently quoted at $6.64 per one Yuan, much lower than $6.71 seen just 11 days ago. Bitcoin has exhibited a slightly positive correlation with USD/CNH. In other words, Yuan weakness tends to lead to BTC gains while CNY strength leads to losses.
Litecoin Continues Slide
Alternative cryptocurrency Litecoin continues a slow slide downward. We’re currently quoted at $3.73 per coin. This is lower by 16 cents or just over 4 percent since last week.
The level to watch is $4.07 per coin. A breakout above this swing high could end the current downtrend. Higher up the $4.15 resistance is another notable level. A clean move above $4.16 may start a new LTC uptrend. More resistance levels above can be found at $4.40 and the $4.50-$4.52 resistance area. These are followed by the November spike high at $4.85 and the round figures of $5 and $5.50. This year’s high for Litecoin at $5.86 is another key level to watch.
On the lower end, the first support is an area from $3.50 to $3.61. A clearing of this area could lead to more losses toward $3.30. The weekly trend for LTC is up while the monthly trend is neutral.