Litecoin Continues to set a Turbulent Course
Litecoin fell rather hard during the trading session on Monday, slicing through the $100 level like it wasn’t even there. This turbulence has continued to set the tone through the week. Beyond that, the 200 day EMA has been tested but we did bounce slightly from there. Ultimately, Litecoin is going to be held hostage by the Bitcoin market, and as a result, it will simply follow what happens over there. After all, most traders involved in the crypto market are going into Bitcoin initially.
Is a major break down imminent?
The Litecoin market may be getting ready to break down rather significantly if the 200 day EMA is sliced through. The $100 level should have offered significant support, and it even attempted to last week. However, we have now seen the market sliced through it like it wasn’t even there and that is a bit concerning. The market closing below the 200 day EMA and perhaps even the $75 level could offer a move down to the $50 level underneath which would be massive as far as psychology is concerned.
The market breaking down could suggest a rather negative turn of events but at this point, I can also make an argument that if we do continue to bounce from the 200 day EMA, that could be a good sign for the market to turn around and recover. If we can break above the $105 level, then the market is free to continue its longer-term uptrend. At this point, you should also pay attention to Bitcoin, because the Bitcoin market, of course, drives the rest of the crypto market.
The play going forward
So trading this market is going to take a little bit of mental acrobatics. In other words, we not only have to worry about this chart but we also have to worry about the overall attitude of Bitcoin, and by extension the US dollar as well, as we are looking at a currency pair, something that far too many crypto traders don’t pay attention to. If there is a US dollar weakness, the Litecoin market may be able to rally. If it doesn’t, that would be a horrific sign for the Litecoin market.
You should also watch Bitcoin because if it rallies it should drag Litecoin right along with it. Beyond that, the $105 level needs to be cleared for a bit of confirmation. However, if we were to get a break down below the 200 day EMA which is currently at the $82.09 level, then we could go down to the $75 level. A breakdown below that opens up a bit of a “trapdoor”, sending this market down to the $50.00 level next. You’ll notice that this market tends to move in $25 increments, so that’s something that you should pay attention to as well. Expect volatility, but so far we are still in an area where we are still looking for buyers, and this could be a value just waiting to happen. You have your levels to watch, and your secondary indicators in these other markets.