Litecoin rallied just a bit on Tuesday to reach above the $114 level. This is the latest in the attempt to recover, as the $100 level has offered significant support. The $125 level above is an area that could be a little bit of resistance from a psychological and “market memory perspective”, as it has been a significant level of support in the past. If we can break above there, then it is likely that we could really start to make a move towards the 50 day EMA above.
The 50 day EMA is sloping lower and is sitting just underneath the $150 level. The $150 level is an area where we have seen a significant breakdown, and where we have a little bit of a “tweezer top” from previous trading and the bounce that we pulled back from. The market has been in a downtrend for a while, so you have to keep in the back of your mind that you do not want to put a lot of money into this market immediately, but if we do continue to see a little bit of upward momentum, I will be adding slowly to build up a bigger position. After all, a trend change is very difficult to sit through, but ultimately this is a market that certainly seems as if it is trying to pick itself back up.
Pay attention to Bitcoin as it can give you a bit of a heads up as to where we are going in smaller markets such as Litecoin. Litecoin has dropped by more than 70% since the recent all-time high, so a lot of value hunters will certainly be attracted to this market. That being said, the road higher will be very difficult, but it is likely that we will see a certain amount of faithful jumping back into this coin. In fact, one could make an argument that accumulation is happening as well, which could lift this market higher. Again though, we have a lot of work to do, so you will have to be very patient as the move higher may take quite a bit of time, and you are going to have to be able to ride the volatility to the upside. This is assuming of course, that we can hold hundreds of dollars to begin with.
