Bitcoin Enters Uptrend After Rally

After several weeks of range-bound trading, bitcoin finally managed to string together some gains. Prices are up $34 dollars since bottoming out at $374.08 last Tuesday. Meanwhile its little brother Litecoin is gaining ground as well, albeit to a lesser extent. But let’s start with bitcoin first.

Bitcoin Downtrend Ends

During the weekend BTC prices broke past the $392.50 swing high, ending the previous downtrend. And today we look set to break to new highs as bitcoin enters rally territory. On the chart below this slow creep higher is clearly visible. What are some of the important levels to watch?

BTCUSDH4-fev16

On the upside weak resistance can be found near the round $410 figure. The high reached two days ago stands at $409.93 on FxOpen. A stronger resistance level can be found bit higher up at $425.50 dollars per coin, followed by the round $450 figure. Above here we find an important level near $460 dollars per coin. A decisive breakout above here could extend the gains toward the round $500 resistance level, last year’s high for BTC/USD.

On the lower end, we have some support near another round level, $400 dollars. Prices bounced close to this level today at $397.30 before heading higher. But to end the current uptrend, the bears will have to push prices below the $374.08 swing low. We have more levels on the way down at $365 dollars, followed by the $350 dollars swing low reached back in January.

Litecoin Still Stuck in a Range

Despite bitcoin’s gains, alternative cryptocurrency Litecoin is still stuck in a range. In the past week, LTC prices have gained just over 3 percent, from $3.06 to $3.16 dollars per coin. This compares to BTC gains of $34 dollars, or 9 percent. The under-performance of LTC/USD can be demonstrated with the 4 Hour chart below. Compare this slightly rising pair with the chart of bitcoin’s strong rally above.

LTCUSDH4-fev16

To end the current range and join the BTC uptrend, the bulls will have to break the $3.33 swing high. A decisive break above here could open the door toward the $3.43 swing high. More resistance on the way up can be found at $3.50, $3.65 and $3.82 dollars per coin.

On the lower end, strong support can be found near the $3 dollars round figure. A decisive break of this support area would technically start a new LTC downtrend. But close to here we have another strong support area in the form of a triple bottom formation around $2.88-$2.89 dollars per coin. A clean breakdown below these levels could see more losses for Litecoin towards $2.70 and $2.50 dollars.

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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