Bitcoin’s Leg Higher Continues

Bitcoin’s leg higher continues for another week. After embarking on a new short-term uptrend last week, BTC/USD built on those gains to climb back above the $1,000 mark. It’s little brother Litecoin isn’t doing as good as it remains range-bound.

Bitcoin’s Trend Higher Continues

Bitcoin managed to climb back above the $1,000 mark this week. We are currently quoted at $1,003 dollars per coin on FXOpen, a gain of $71 dollars compared to last Tuesday. In percentage terms, this is a move of 7.6 percent.

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Technically we’re still in rally mode. To end it, the bears will have to push BTC back below the $900 figure on FXOpen. Slightly below here there is some support at the $875 swing low. This is followed by a large support area between $730 and $750 dollars. A clean break of this area could intensify the move lower. On the upside, no clear resistance levels can be seen until the multi-year high at $1,096 on FXOpen and $1,160/65 on other USD exchanges.

Fundamentally there have been no updates on the China situation, neither from the authorities nor from the bitcoin exchanges. The market is probably going by ‘no news is good news’ in this scenario. However, the risk is still elevated. Bitcoin futures in China are trading at a significant discount compared to the spot exchanges. A popular futures contract expiring in March is quoted at a $27 dollars discount right now. Even the weekly futures are trading at $5 discount.

This represents a gain of over 25 percent annualized for those brave enough to go long and take the price/counter-party risk. This situation is highly unusual as quarterly futures contracts almost always traded at a premium in the past. Speculator sentiment is clearly still bearish. But to throw a bone to the bulls, sentiment has been bearish during this entire run-up from January 11th. On the longer-term charts (weekly and monthly) bitcoin remains in an uptrend.

Litecoin Still Locked in a Range

Litecoin prices remain locked in a range. During the past seven days, the total high to low range was only 17 cents or 4.3 percent. This is a relatively small amount for a cryptocurrency.

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A new rally requires a break above the $4.12 swing high. A new downtrend needs a move below the $3.78 swing low. You can see more of the support/resistance levels on the chart above. On the weekly charts, LTC/USD is in a slight uptrend but the monthly (just like the daily) charts are still in neutral mode.

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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