Bitcoin Breaks $400, Enters Downtrend

FXOpen

Bitcoin entered a new downtrend last week after breaking the important $400 figure on Friday. Prices subsequently fell by $50 dollars, or just over 12 percent, to a new monthly low of $349.82. Its little brother Litecoin followed the move lower with losses totaling 13.5 percent. As usual we’ll start with bitcoin first.

Bitcoin Breaks $400 Dollars

After trading in a range for close to a month BTC/USD finally made its move. Prices barreled past the important $400 figure on Friday, closing at $386 dollars per coin. The losses continued for another day on Saturday as bitcoin hit a new one-month low at $349 dollars. We have since bounced back somewhat to $386.33 dollars.

BTCUSDDaily-jan19

Despite the gains during the past few days, the move higher is likely a retracement within a larger downtrend. The first resistance above here can be found at $400 dollars, the former support, now turned resistance. But while a daily close above $400 should worry the bulls, the trend lower will technically remain in place until we get a decisive break above the $450 level. Higher up, a move beyond $470 dollars per coin would start a new uptrend in prices.

On the lower end, the first important support can be found at the Saturday low near $350 dollars. A break below here could extend the losses towards $340 and $310 dollars per coin. More support on the way down can be found near the $300 round figure.

Litecoin Enters Downtrend

Prompted by Bitcoin’s losses, Litecoin entered a new downtrend as well. Prices broke the support at $3.35 dollars on Friday and by Saturday we were down over 13 percent to $2.89 dollars per coin. This was a new two-month low for the cryptocurrency. Similarly to bitcoin, LTC/USD bounced back from the lows and is currently quoted at $3.03 dollars.

LTCUSDH4-jan19

The bounce near $2.88 shouldn’t be a surprise to our readers. In our previous LTC update, we noted this figure as potential support. This was the November low for Litecoin. The October low wasn’t far off at $2.92 dollars per coin. A clearing of this support area could open the way for more losses towards $2.70 and $2.50 dollars. More support on the way down can be found at the January swing high at $2.40 dollars, followed by a strong support area near $2-$2.10 dollars per coin.

On the upside, while a move back above the former support at $3.35 should worry the bears, the trend lower will remain in place until the $3.65 dollars swing high is taken out. A decisive breakout above this level could also start a LTC new uptrend.

FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage — at your service. Open your trading account now or learn more about crypto CFD trading with FXOpen.

*Important: At FXOpen UK, Cryptocurrency trading via CFDs is only available to our Professional clients. They are not available for trading by Retail clients. To find out more information about how this may affect you, please get in touch with our team.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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