I think that Litecoin has taken offence from my last analysis As Flat As It Gets and surged over 20% during the weekend to cross the overhead resistance.
Litecoin is now trading up $0.839 or 22.45% at $4.575, thanks to a nearly 6% rise in Bitcoin.
Even with technical indicators remaining bearish, Litecoin surged during the weekend helped by a rise in the leading cryptocurrency Bitcoin. It has been following Bitcoin since the dramatic fall (see the big red candle in the chart above), replicating its every move. Even now, Litecoin has halted its upmove as Bitcoin has hit a resistance.
Litecoin Chart Structure – With these gains, Litecoin crossed its first barrier of $4.100 and even pierced above its previous low of $4.280. The main task before the bulls now will be to cross above the previous peak of $5.237 in order to effect a higher top.
Moving Average Convergence Divergence – The MACD has registered a bullish crossover with the Signal Line and has lifted the Histogram in the positive region. At the time of writing this analysis, the respective values of MACD, Signal Line and Histogram were 0.1356, 0.0866 and 0.0491 respectively.
Momentum – The Momentum indicator has extended its gains to 0.8853.
Money Flow Index – The MFI has also moved upwards in accordance with the price advance. MFI currently stands at 51.7841.
Relative Strength Index – The RSI value is now above the neutral level of 50 at 55.4525.
Even though the technical indicators have turned bullish, I am not really convinced with this rally. I believe that it may be another attempt to trap the market participants. But, those who really believe in this price appreciation should go long by placing a strict stop-loss below the previous resistance of $4.100. Short positions can also be considered near $5.237. Follow the stop-losses!