Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
After the minor “blip” from last week, Namecoin vs Bitcoin has re-continued its downtrend of 2014, although we are seeing some support at one of the Fibonacci levels.
Let’s take closer look at the NMC/BTC H4 chart below (click to expand):
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I’ve performed the Fibonacci study from the low of March at 0.00524 until the swing high on the 4th of this month at 0.0059.
You’ll notice how, despite the reversal on the 3rd until the 4th, the middle Bollinger line remained bearish. Price has been falling ever since, although not as quick as it did prior to the reversal. However, generally speaking, one can gauge a decent idea concerning the consistency of the trend, if not necessarily its strength, just by looking where price remains overall with relation to the Bollinger bands.
In this case, since the high at 0.0059, NMC/BTC has stayed within the middle and lower Bollinger bands, telling us that there’s some smooth bears at play here, albeit some bear cubs. Bear cubs I say, purely because of the decreasing lack of volume as the hours have passed, with the Bollinger lines getting tighter and tighter.
That tightness is being caused by the 78.6% Fibonacci retracement level, where price is struggling to get past, marked with a white ellipse, not helped by the Stochastics, which are now heading upwards.
Even if price does manage to break 78.6%, I still expect the supportive trendline I spoke about in my last NMC/BTC analysis to hold firm.