Bitcoin, Litecoin Rally but Follow-through Lacks

Both bitcoin and litecoin have rallied strongly during the past few days. While the BTC gains were mainly the result of a large margin call, LTC followed suit, despite no margin calls of its own. But let’s start with big brother first.

Bitcoin Spikes on Margin Call, Follow-through Lacks

Bitcoin spiked $8 dollars in 8 minutes on April 21st. The surge happened right at the open of the last hour of the trading session. As prices rallied, a large $3 million dollars margin call was issued on OKCoin futures. As you might imagine, the call triggered more gains with prices rallying $5 dollars in the two minutes it took to execute the order. The OKCoin futures rally had a ripple effect across all other sites, including FxOpen. Here we rallied from $222.74 to a high of $230.35 in eight minutes. The Tuesday gains were followed by a smaller sized move yesterday with BTC/USD peaking at $236.56 before falling back.

BTCUSDH4-apr23

While the follow-through after Tuesday’s spike was lacking, the move higher will force us to make some changes to our scenario. We have now rallied over $20 dollars since the swing low last week and are again retesting the previous support area between $230 and $235 dollars per coin. This previous support has now turned into resistance. While the trend is still down, caution is advised. A BTC rally above yesterday’s high at $236.56 may end the current downtrend.

This will not automatically translate into a bullish scenario however. Bitcoin will need to move much higher to trigger a sustainable rally, preferably by going over $258 per coin. On the lower end, last week’s swing low at $213 dollars may give the bears some pause. But a stronger support can be found in the area between $200 and $208. A clearing of the round $200 figure could translate into more BTC losses.

Litecoin Rallies 10 Percent From Lows

Litecoin rallied 10 percent from the $1.31 low reached last week. This compares to a bitcoin move of 6 percent during the same time period. To be fair, LTC/USD fell more during the previous downtrend, declining by as much as 22 percent since April 6th. Bitcoin fell by 17 percent during the same time. One litecoin is currently going for $1.428.

LTCUSDH4-apr23

Litecoin is in a similar boat as bitcoin. While the downtrend is still technically in place, the bulls just need to push prices higher by few percentage points to end it. The previous swing high at $1.467 may be the deciding level, although the more conservative approach calls for a breakout above $1.50. But to generate a sustainable rally, LTC/USD will need to go above $1.66 per coin. On the bottom, the first support stands at the April 14th low of $1.31. A clearing of this level coupled with a break below $1.30 could lead to more losses for LTC. The year’s low at $1.05 is another important support. A break below the $1 dollar parity level should lead to more losses for litecoin.

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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