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I will look for opportunities to short Litecoin, right along with the other alt coins around the crypto world.
Litecoin continues to go sideways around the $67.50 level, as we have been consolidating for a week. The question now is whether or not we are trying to build some type of base, or if we are taking a bit of a breather before we start shorting again. Nothing in crypto looks very good at the moment, so I do believe that it is probably only a matter of time before we see Litecoin get hammered.
We could get a bit of a rally in the short term, and if we break above the $75 level, we could see a potential bounce at that point. If we do bounce like that, it is possible that we could go to the 50-day EMA, or even the $100 level. The $100 level is an area where we have seen previous support, which should now offer significant resistance. Because of this, the market will continue to see a lot of interest in that area, and I would short any signs of exhaustion after a bounce to that region.
That being said, crypto looks miserable and it is worth noting that risk appetite is all but shot at this point. Because of this, I think that it is more likely than not we are going to break down. Last week we ended up forming a bit of a hammer, so if we break down below it, Litecoin could get sold off quite drastically. At that point, I would anticipate that Litecoin would break the $50 barrier, perhaps dropping significantly.
Keep in mind that the Federal Reserve has been tightening monetary policy, and it looks as if it is going to keep doing so. Because of this, traders are nervous about anything related to risk and risk appetite, which of course Litecoin is. The crypto markets in general continue to be very bearish, and as a result I think that some of the smaller markets will certainly get crushed. Until the Federal Reserve changes its tune, and we start to get more appetite for risk, there is no way that Litecoin can sustain any type of gains. Because of this, I will look for opportunities to short Litecoin, right along with the other alt coins around the crypto world. In fact, I do not think some of these are going to survive.
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