Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
Namecoin has been falling down since the 16th, and doesn’t look like stopping anytime soon, at least not until a major support zone which is a fair distance away yet.
Let’s take a closer look at the NMC/USD four hour chart below (click to expand):
I’ve performed the Fibonacci study from the year’s low on the 25th of February at just above 2.6, to the month’s high on the 4th of March, at 4.15.
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I explained in yesterday’s analysis how price was sticking to the 50% mark for quite some time, (in the white ellipse) although it was likely to fall until at least the 61.8% Fib retracement level, where’s we’d observe a bounce. This is exactly what happened, before price delved into another push down, this time the bears strong enough to break 61.8%, around 3.2.
I’ve marked with a blue vertical ellipse the point at which the sell initiated, coinciding with a number of agreeing technicals. The Stochastics crossed downwards, the Accelerator Oscillator turned red, as did the Awesome Oscillator.
In fact, as I type this analysis, the Awesome Oscillator is still red, with multiple candles consecutively closing below the lower Bollinger band, most of them possessing fairly long upper wicks, further evidence of a bearish market.
With the 61.8% level firmly broken, and technicals still indicating further bears, I expect Namecoin to drop further until at least 3.000 within the next 24 hours, and then later in the week we can expect a test of 78.6% Fib.
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