Bitcoin & Litecoin Charts – Broken Support to Lead to More Breaks
Last week, we noted bearish set-ups in Ethereum and Bitcoin. Indeed, the sector as a whole has weakened and took a big spill yesterday on headlines of a Korean exchange hack. Generally, with the sector having lost its luster and the current environment viewed as part of a longer-term unwind in price and speculative interest, negative headlines are likely to be more of a bear than positive ones will be a boon.
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Bitcoin broke 4-month trend-line support
In last week’s commentary, we noted a short-term bearish set-up in Bitcoin, but also highlighted a 4-month-long trend-line not far below which may help keep it supported and in the process of building a broader wedge pattern.
Yesterday’s downdraft clearly wiped out the trend-line, and support at 6400 and just above 5900 are both at risk of breaking in the near-term. A decline below the spike-low at 5920 would likely set off an acceleration in selling, as it was an important low following the bloodbath off record levels.
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BTC/USD Daily Chart (Trend-line broken)
Litecoin broke one series of support levels, others could be next
While the lower-highs since December and the lows at relatively the same price in recent months don’t make for a textbook descending wedge, the increasingly smaller rallies in the past 7 months imply LTC/USD may be ready for another round of carnage.
Yesterday marked the lowest closing print since December and below the March and late-May lows. Take out 102 and the phycological level of 100 and we may see another big leg lower in the weeks and months ahead.
LTC/USD Daily Chart (Lower-highs, support breaking)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.