Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
Namecoin is on the verge of a major support zone, at just above 2.6, but will it hold for much longer?
Let’s take a closer look at the NMC/USD chart below on the H4 timeframe (click to expand):
As we can see, there is a major support at around 2.6, from back in late February, when it was strongly tested twice in the same day. Indeed, price is now re-testing 2.6 as I write this analysis, and given the technicals in motion, we could see a break pretty soon.
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Firstly, we have our Accelerator Oscillator having turned red, secondly we have our Awesome Oscillator also red, and thirdly we have our Stochastic Oscillator crossing downwards, with no sign of any change of momentum.
Also, if we observe the way the market reacted to 2.6 late last month, we’ll notice that price shot back up rapidly as soon as 2.6 was hit; whereas on this occasion we just aren’t seeing anywhere near a similar reaction. This is a further indication of bears taking a stranglehold.
Put simply, all the technicals are telling me there’s a strong chance of a break here. If that occurs, we could see a drop to above 2.5 by tomorrow, since it’s actually a Fibonacci extension at 161.8%.
The only issue is that price is dangerously close to the lower Bollinger band, and since the market often wants to correct itself by coming back into the realms of the bands as soon as possible, this may cause some hindrance.
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