A new Litecoin scam is spreading during the holiday season. It follows the same principle as previous ones, asking people to send Litecoins to a given address, with the promise of a greater return. Since the Crypto Winter of 2018, which was partially mirrored in 2019, the capital of institutional traders surpassed retail traders. Scammers continue to target uninformed entrants to the cryptocurrency market with great success. This scam emerged at the same the LTC/USD started to recover from depressed levels, with a breakout above its support zone.
The Force Index, a next-generation technical indicator, confirmed the breakout in this cryptocurrency pair with a recovery of its own. After the LTC/USD pushed above its support zone, the Force Index accelerated above its horizontal resistance level and converted it into support. An ascending support level formed, adding to bullish pressures, but this technical indicator halted its advance, resulting in the emergence of a descending resistance level, as marked by the green rectangle. The Force Index remains in positive conditions, suggesting bulls remain in control of price action, and a new push high is anticipated.
With the broad bearish sentiment across the cryptocurrency market intact, traders should remain careful as volatility is anticipated to increase. The breakout in the LTC/USD above its support zone, located between 35.47 and 38.53 as marked by the grey rectangle, included a price gap to the upside. A pause in the advance followed as this cryptocurrency pair approached its descending 38.2 Fibonacci Retracement Fan Resistance Level, but a second push higher is favored. You can learn more about a price gap here.
Given the rise in bullish momentum after the breakout, the LTC/USD is likely to eclipse its 38.2 Fibonacci Retracement Fan Resistance Level, converting it into support. This may initiate a short-covering rally, driving this cryptocurrency pair into its next short-term resistance zone. This zone is located between 46.62 and 48.89, as marked by the red rectangle. The 61.8 Fibonacci Retracement Fan Resistance Level has reached the top range of this zone and is expected to end the pending breakout extension.
LTC/USD Technical Trading Set-Up - Breakout Extension Scenario
Long Entry @ 40.25
Take Profit @ 48.75
Stop Loss @ 38.00
Upside Potential: 850 pips
Downside Risk: 225 pips
Risk/Reward Ratio: 3.78
Should the Force Index complete a double breakdown, taking it below its ascending support level, the LTC/USD is likely to reverse. The outlook for this cryptocurrency pair remains cautiously bullish due to mechanism in place to invite miners back into the network as the hashrate contacts. A duo of fundamental developments additionally boosts the outlook. The next support zone is located between 29.99 and 32.85, an excellent buying opportunity.
LTC/USD Technical Trading Set-Up - Limited Breakdown Scenario
Short Entry @ 35.00
Take Profit @ 30.00
Stop Loss @ 37.50
Downside Potential: 500 pips
Upside Risk: 250 pips
Risk/Reward Ratio: 2.00
