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Last week, we looked at Bitcoin and Litecoin, noting broken support levels likely leading to more breaks ahead. The group as a whole is quite weak, as my colleague Nick Cawley also pointed earlier out with the Ripple chart. The short-term picture for cryptocurrencies remains firmly bearish within the context of a much larger unwind likely to continue for the foreseeable future. There will be rallies along the way, as we’ve seen, but the general outlook isn’t good for this once manic-market waking up to reality.

See how positioning changes on the IG Client Sentiment page can help identify price direction in cryptocurrencies and other major markets.

Bitcoin finding little lift, watch 5920

Bitcoin not long ago broke a key trend-line running back to February and is now flirting with breaking the low created back then. The 5920 level is considered quite important given it ended the initial plunge off the record high – it was the decline which marked the beginning of the end.

A drop below 5920 could spark acceleration in selling, but as we’ve seen volatility is slowly dying along with the market’s zeal for cryptocurrencies. Acceleration may or may not happen with that said, but breaking below 5920 will still be an important event.

Looking beneath this notable threshold, 5555, then 4979 show up as levels to watch – then nothing until below 3k.

Check out this guide to learn more about how to trade Bitcoin and other cryptocurrencies.

BTC/USD Daily Chart (5920 is important)

BTC/USD Daily Log Chart, 5920 is an important level

Life for Litecoin is tough under 100

Litecoin declining below 102 was important, it is the comparable level to 5920 on the Bitcoin chart. Then came the psychological level of 100. Right now, price action is weak beneath these key levels and set to continue to weaken.

Currently, LTC/USD is finding support around a peak from September, but it’s not viewed as a significant level given the more important breakdown. Further weakness might not see meaning buying for a good distance lower – 69.48, a minor peak from October, may provide some relief.

LTC/USD Daily Chart (Under support, psych level of 100)

LTC/USD Daily Log Chart, under support/100 level, look for more weakness

Helpful Resources for Cryptocurrency Traders

Whether you’re a new or experienced cryptocurrency trader, we have several resources to help you;Introduction to bitcoin trading guide, indicator for tracking trader sentiment, and a weekly webinar discussing the latest developments.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX