The last few days has seen Namecoin vs Bitcoin rise tremendously, in stark contrast to its trend over the past few weeks, only for some firm bears to take control of the reins again.
First thing is to observe NMC/BTC price action from a longer term view, in this case the Daily chart, below (click to expand):
I’ve performed the Fibonacci study from two obvious locations, i.e. from the high of the year at 0.0122 until the low of the year at 0.00365. When we get such clear highs and lows, it really leaves no room for any discretion, and as such, the Fib study here is as clear as can be. It helps eliminate the need to keep applying multiple Fib studies to search for confluences.
Immediately we can see how the 38.2% Fibonacci retracement level provided strong resistance, this despite the fact that other technicals were still pointing to further bulls.
Yet we’ll need to zoom into the H4 chart to attain a further sense of current happenings, see below:
Here I’ve performed the Fib study from the low of the year at 0.00365 until the high since then at 0.00654. Notice the candle marked in red. There are two main characteristics of this particular candle that pointed to a potential retrace, since the candle a) closed as a strong bull candle with barely a lower wick, and b) opened and closed above the upper Bollinger band. Confirmation of the retrace soon came, by way of the indicators marked with an elongated yellow ellipse, as the Stochastics were heading down from an overbought position, the Accelerator Oscillator had turned red, as had the Awesome Oscillator, allowing price to fall as low as 50% at 0.0051, and whilst there is some support here now, it’s hard to see it holding for too long.
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