Namecoin continues to hover around 2.5 this week, carrying on from last week, although we could see some bears pick up momentum fairly soon.
Let’s remind ourselves of what happened last week on NMC/USD, since it’s imperative we have this in mind for our current analysis. I’m pasting here the Fibonacci extension study from last week (click to expand):
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I mentioned then that, “we have price hitting the 423.6% Fib extension, but that on its own doesn’t necessitate there’s going to be a reversal or even a retrace. Until that is, we see what happened on the very next candle, marked in a red ellipse on the first chart, since this candle a) closed as a strong bear candle and b) both opened and closed above the upper Bollinger band. This tells us a potentially strong retrace is on the way.” And from what I’m seeing today amongst the technicals, I fear we could see Namecoin drop further in value over the course of the week, for a few reasons. Check out the current NMC/USD chart below on the Daily timeframe:
I’ve performed the Fibonacci study from the year low at 1.34 until the month high at 3.35. We can see that ever since the testing and bouncing off 50% at 2.345 (marked in blue), price hasn’t really done much, perhaps threatening to close above 38.2%, but that’s about it.
One thing we can glean from the following two candles (post 50% testing), is that the bears are attempting to take hold, since both of the candles possessed long upper wicks, essentially shooting stars, with minimal lower wicks. This, in conjunction with the fact that the Stochastics are now crossing down from an overbought positions, plus the Accelerator Oscillator and Awesome Oscillator turning red, tells me the bears will very likely push price down again – my guess is to at least the 50% at 2.345, possibly this week.