Yesterday, Litecoin did not bounce off from the strong support level of 146.04 after its breakdown. At the same time, the growth in the area of 146.04 – 171.25 was stopped by the intermediate level of 151.83 (dotted line).
Today, following bitcoin, altcoins corrected downwards. At the time of writing this article, LTC/USD reached the support level of 146.04. An attempt at a false breakout of the horizontal shadow on the 4H chart create prerequisites for further recovery of the price.
Thus, there is a possibility of an upward rebound. Therefore, it can be a signal for long deals. A risky scenario for entering the market is to buy from the current values with a stop for the shadow of the previous price. The nearest target for growth will be yesterday’s highs near the local resistance level of 151.83.
Cautious traders should wait for a more distinct rebound of LTC/USD as it will confirm that the pair will consolidate near the support level of 146.04. However, there is a risk of losing the right moment as well as part of the profit, getting a less favorable ratio of stop and profit in the trade. What to choose? I think that we risk it in any case. If we enter the market now, we will place a small stop. In the extreme case, when the horizontal level of 146.04 is broken and the pair reverses upwards, it will be possible to re-open long deals.
An alternative scenario would be a breakdown of the support level of 146.04. If LTC/USD consolidates below this level, it will decline to the nearest target at the horizontal level of 135.89.
The material has been provided by InstaForex Company – www.instaforex.com
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