Bitcoin Rally Ends with a Bang
Bitcoin’s bull run is finally over. Prices peaked at $1,096 on FXOpen (around $1,163 on other exchanges). Just three days later a low of $770 dollars was hit on FXOpen (around $810 on other exchanges).
This is almost exactly where prices topped out back in June. In a classic move of former resistance turns into support, prices bounced here. We are currently quoted at $868 dollars, $98 above the lows but a substantial $228 dollars below the highs. The People’s Bank of China held a meeting with major bitcoin exchanges in the country and allegedly issued them a warning. However it is likely that incoming restrictions from China were part of the reason behind the large rally in BTC prices since November 3rd. Chinese bitcoin exchanges account for over 90% of the trading volume. Thus news of bitcoin restrictions in China tends to have a high impact on the market price.
On the technical front, we are now in “no man’s land.” A resumption of the rally would need a break above the $1,096 highs, which doesn’t seem likely in the foreseeable future. Below here we find resistance at the round figures of $900 (weak) and $1,000 (strong). On the lower end, a downtrend requires a decisive break below the $770 swing low. Support below here can be found at $750, $730 and $700 dollars per coin. The longer trends for BTC/USD (weekly and monthly) remain bullish.
Litecoin Follows Big Brother
Litecoin prices initially followed bitcoin’s crash downward. We fell to a low of $3.40 on January 7th. But from here a strong bounce occurred and LTC/USD is trading at $4.27 right now. Compared to bitcoin, this is closer to the January highs then the lows, so price action here is somewhat more bullish.
Still the short-term trend remains undecided. To resume the rally, Litecoin will have to breakout above this year’s high at $4.60. On the other hand a new downtrend requires a break below this year’s low at $3.40. Above here we have several weaker support levels at $4.08, $4 and $3.95. This is followed by the $3.64-$3.68 area and $3.50 per coin. The medium-term trend for LTC/USD is bullish but the long-term (monthly) trend is still neutral.