It hasn’t been a good week for bitcoin or litecoin. Big brother had a sharp retracement from $462 to $435 dollars while LTC retreated from $4.19 to $3.61 dollars per coin. After that wild ride, the past few days have been range-bound for the two major crypto-currencies.
Bitcoin Waiting for Direction
Bitcoin is waiting for its next directional move. The April move higher topped out at $462 dollars. From here we retraced to $435 dollars. Post that mini crash both BTC and LTC has been more or less unchanged. What’s next for bitcoin?
The upward momentum is gone but the trend is still up. To regain the lost momentum, the bulls will have to make a break above the $462 dollars swing high. As we’ve mentioned in previous articles we have a major resistance area from $461-$465 on Fxopen and $470-$475 on other exchanges. A decisive breakout above this important area may spark a run for the $500 round figure. This was last year’s high for BTC/USD. A break of this important level could intensify the gains.
On the other end, a clean break below the latest swing low at $435 may end the uptrend. A new trend lower requires a break below the $412 swing low as well. Some support levels below here include the round $400 figure followed by $394 dollars (weak level) and $374 dollars per coin. This year’s low for bitcoin is near the $350 round figure at $349.82. This is a potentially strong support level.
The Wright Controversy
Although likely not the reason, a potential catalyst for the sell-off was the Wright controversy. The Economist and several other major publications posted articles that the eccentric Austrian could be the creator of bitcoin. Since then however some doubts have emerged. For more on this developing story, head over to the Economist.
Litecoin Retraces Some Gains
Alternative cryptocurrency Litecoin is trading down this week. The initial spike hit $4.194 last Wednesday. From here the bears pushed prices down to $3.61. We’re currently trading at $3.71 dollars per coin.
Similarly to Bitcoin, for Litecoin the trend is still bullish but with no momentum. To regain the lost momentum the bulls would need to break the $4.19 swing high. Above here we have the round $4.50 figure, followed by the former swing high at $4.85. This was the highest point for LTC/USD during the bitcoin rally back in November of last year. Higher up we have another round figure at the $5 dollars figure. From here upward there’s a large gap to the next level at $8.64 dollars per coin, last year’s high for LTC.
On the downside, a break below the breakout point at $3.26 dollars could end the current rally.