Cryptocurrencies Pause as Bitcoin Claws Back Some Ground

FXOpen

Cryptocurrencies paused their decline in the past two days as bitcoin staged a 6 percent rally. Namecoin and Peercoin followed big brother higher by rallying a similar percentage. But bitcoin’s silver, Litecoin, stayed weaker, only gaining ten cents, or around 2.8 percent.

Bitcoin Gains Back Some Ground

Bitcoin gained back some of the lost ground after prices bounced up from the $319 mark. On Wednesday, BTC/USD rallied from $323.86 to a daily high of $338.99. From here, BTC prices have retraced somewhat and we are currently trading at $334 per coin.

btc-nov6

While the recent move up should give the bears some pause, the downtrend is still in place. Bitcoin will need to both break and stay above the $350 mark to end the current downspell. But to stage a sustainable rally, BTC may need to take out more of the levels to the upside, probably as high as the $400 round figure. On the downside, another retest of $319 will likely lead to a break lower. This is turn should lead to quick losses toward the $300 round figure.

Lower still, the October 5th swing low at $285 and the $266 level may provide support to falling prices. Like we’ve been saying for some time, the $266 mark may prove to be a crucial milestone for BTC, that is, if we get that low. This was bitcoin’s yearly high for most of 2013 until the November rally. A clear break below $266 may usher in a period of prolonged losses for BTC.

Litecoin Trades Close to Yearly Low

We mentioned above that unlike other cryptos that gained a similar percentage as bitcoin (5-6 percent) litecoin only rallied by 2.8 percent. Things are not looking good for LTC as the cryptocurrency is currently trading at $3.59, just 5.8 percent above its yearly low near $3.40.

ltc-nov6

This weakness is magnified by the fact that the $3.40 mark was already tested back in October. On October 5th LTC/USD moved as low as $3.389 before bouncing back. A renewed pressure on the support area near $3.40 may lead to a break lower. If prices manage to take out $3.389, the first support for LTC can be found at the $3 dollar mark. To end the current downtrend, at least in the short-term, Litecoin will need to climb back above $4 dollars, preferably also above the October 14th swing high at $4.22.

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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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