Cryptocurrencies reversed almost all of the gains made in the previous couple of days. Bitcoin is currently trading at $217 per coin, a far cry from the $300 round figure it hit just three days ago. Litecoin is trading 25 percent off its high at $2.40 and Namecoin is quoted at $0.46, almost 20 cents lower compared to it’s price on Monday. In our article last week we hinted that the current rally may be unsustainable. On Tuesday we cautioned our readers again: ”While the initial move above $266 was bullish, the massive rollback means that bitcoin is now back into uncharted territory. To resume the rally, BTC/USD will need to climb above $303 per coin.”
Namecoin Reversed All Gains
Alternative cryptocurrency Namecoin reversed all of the gains from the preceding rally. Prices hit a high of $0.653 on Monday but by mid-day on Thursday we were trading back down to $0.462 per coin. The significant move up followed by a complete rollback leaves us with no clear direction going forward.
Some notable levels on the downside include the weak support at $0.40, followed by the the January 15th swing low at $0.379. A decisive break below here may lead to more losses. Further down possible support can be found at $0.30 and $0.25 per coin. Both of these levels haven’t been tested this year, so treat them with caution. On the upside, to resume the rally, NMC/USD will need to take out $0.65. Resistance levels above here include the $0.70 flat figure, followed by an area extending from $0.783 to $0.821. A clearing of this resistance area should open the way for $0.90 per coin and eventually parity.
Litecoin Keeps 50 Percent
Unlike Namecoin and other cryptos which surrendered all gains, Litecoin is still holding on to about 50 percent. The move up that started last week began with an early push higher by LTC. Last Saturday Litecoin rallied 16 percent, from $1.40 to $1.73. Just as a comparison, big brother bitcoin only moved up by 4 percent on that day. On Sunday, LTC/USD rallied again, this time from $1.73 to a high of $2.40 flat, eventually closing the day higher by a whooping 30 percent at $2.25.
But by Monday the general weakness across the board and bitcoin’s sell-off took its toll and LTC fell to $2.05. The declines continued in the last two days and we are currently trading at $1.80 flat. Similarly to other cryptocurrencies, the large sell-off nullifies the previous move up, leaving us with no direction. To restart the rally, LTC/USD needs to climb back above its previous high at $2.40 per coin. Higher up we find some weak resistance at the $2.50 round figure, followed by the December 25th swing low near $2.64. On the downside, notable support levels include the $1.50 mark, followed by $1.23 and the parity level at $1.
FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage, 30% margin call, 0.01 lot minimum transaction size with no maximum — at your service. Open your trading account now or learn more about crypto CFD trading with FXOpen.
*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules respectively. They are not available for trading by Retail clients.
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.