For the past ten days, Namecoin vs Bitcoin has been struggling to rise beyond a certain resistance level, which seems to be getting stronger.
Let’s take a closer look at the NMC/BTC chart on the H4 timeframe below (click to expand):
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I’ve drawn the red horizontal line of resistance, where we can see it’s been tested on five occasions (circled in blue). The more times a support or resistance area gets tested and rejected, then the more powerful this zone becomes, especially if it’s located on a high timeframe such as the H4 and above. On the first two tests, we can see that the candles’ upper wicks surpassed the resistance line (without closing above it), but for the past three attempts, there’s just been a total rejection without upper wicks having a say. This is further proof of a strengthening line of resistance.
Another reason why this area is proving a stumbling block for price is the fact that it’s a psychological number, at 0.00500.
Now, I’ve performed the Fibonacci study from the latest swing low at 0.00452 to the current high at 0.005. We can see immediately that price is hovering around the 23.6% Fib level at 0.00488, which is also the middle Bollinger band.
We may see a drop to 50% by tomorrow, seeing as though the Stochastics are in overbought territory whilst crossing down, and both the Accelerator and Awesome Oscillators have turned red a few candles prior.