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Buying or Shorting Litecoin (LTC)? Technical support & resistance

November 19, 2020 18:04
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litecoin, ltc,

If you already tried trading Bitcoin and Ethereum and are looking for a more up and coming crypto currency, we might have a trading suggestion to look into. Here at Short Selling, Stanko discuss the latest important news connected with the Litecoin (LTC) and how to either buy or short this cryptocurrency.

Litecoin is the 7th largest cryptocurrency with a market cap of around $3 billion and it is important to say that Litecoin continues to interest investors because of its close connection to Bitcoin. Litecoin is a very popular cryptocurrency to monitor since it appears to hold a number of advantages over Bitcoin. Litecoin provides faster transaction confirmations (2.5 minutes on average) and Litecoin’s transaction fees are, on average, considerably lower than that of Bitcoin. The Litecoin network invites users who want fast, quick solutions involving cryptocurrency and blockchain technology. A very good team stands behind the Litecoin network and it is important to say that Litecoin was created by a Google employee Charles Lee. According to the latest news, Litecoin is preparing to collaborate with Cardano on cross-chain interoperability. This deal will add several features including cross-chain fund settlement, smart contracts, and improved scalability.

After reaching a new yearly high of $84, the Litecoin surge was cut short, as the coin entered a free fall that took it to a new bottom of $24. Now, a recovery seems to be starting but there will be certainly lots of opportunities for shorting this cryptocurrency. The cryptocurrency market is easily affected by unpredictable events and most traders are now taking advantage of declining needs. Litecoin price varied between the $42 and $51 last several weeks but the price is still not able to stabilize above the $50 resistance level.

Litecoin at Skilling

How to buy Litcoin?

If Litecoin breaks $80-84 per coin for a couple of days, the trend would be strongly upwards again. Many websites allow trading with Litecoin, such as Skilling or Stormgain for Europeans or eToro for Americans.

How to short Litecoin (LTC)

The price of Litecoin is still far away from the major LTC price predictions and according to the rules of technical analysis, the “bearish” trend of this cryptocurrency is still very strong. Shorting the Litecoin is basically betting against the Litecoin and when you short the LTC you are expecting the price to go down instead of up. So you can make money when the price goes in the opposite direction and for those with great skill is a way to make some good money. One of the easiest ways to short Litecoin is through a margin trading platform. Many brokers allow this type of trading, with margin trades allowing for investors to “borrow” money from a broker in order to make a Litecoin trade. It's important to remember that there may be a leverage factor, which could either increase your profits or your losses. It’s not a good idea to hold a short position for long periods of time or to leave an open short position with no stop-loss order. Many cryptocurrency exchanges allow margin trading at this stage, with Capital.com, AvaTrade, and Plus500 or Stormgain as some popular options. It is very hard to say which platform is the best because this depends on the experience and habits of each investor/trader. Another way to short the Litecoin is to sell this cryptocurrency at a price you feel comfortable at, wait until the price drops, and buy the Litecoin again. Alternatively, just follow the route up where Litecoin currently seems to go up and simply buy it.

Technical analysis

Litecoin graph
On this chart (the period from November 2019), I marked major support and resistance levels that can help traders to understand where the price could move. The more often price tests a level of resistance or support without breaking it, the stronger the area of resistance or support is. When the price passes through the resistance, that resistance could potentially become support. Litecoin remains in the „neutral- bearish phase“ but if the price advances again above $80-84 the next resistance could be located around $100. The current support level is $60 and if the price breaks this level it would be a “SELL” signal and we have the open way to $40. If the price drops below $35 which represents very strong support, the next target could be located around $30.

Conclusion

After reaching a new yearly high of $84, the Litecoin surge was cut short, as the coin entered a free fall that took it to a new bottom of $24. Now, a recovery seems to be starting but there will be certainly lots of opportunities for trading this cryptocurrency in the near future. Litecoin remains in the „neutral- bullish phase“ and if the price drops below $60 which represents the current support, the next target could be located around $40. Happy trading with Litecoin.