Further falls are happening across crypto coins today, including Namecoin, which actually, unlike Bitcoin and Litecoin is merely continuing its long term bearish trend since the start of the year, and even though price is now located at a major support zone, the trend may continue.
Let’s take a look at the NMC/USD chart below on the Daily timeframe (click to expand):
I’ve drawn two lines here. Firstly, the yellow downwards trendline. We can see how price has been following the path of this line for some days now. Secondly, the red horizontal support line – where price is currently at.
Now, this red line is an extremely strong support area for three main reasons:
1. It’s at a psychological whole number – 2.000.
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2. It’s been tested on two previous occasions, circled in blue.
3. It’s the lowest point of this year.
In fact, there are further reasons as to why price may stall at 2.000, since, if we zoom in closer, we can see how both Bill Williams’ Oscillators, the Accelerator and the Awesome are now green, and the Stochastics are extremely oversold, beginning to slowly look upwards (click below to expand):
I’ve performed the Fibonacci study from the last major swing low to the last major swing high on the Daily – what we’re looking for is Fibonacci extensions.
Put simply, either the yellow resistance trendline is going to break or the red support line is going to break. I fear it be may the latter, there’s little hope for Namecoin and other coins, partly due to further bad news from China, although the multitude of powerful potential bullish reasons given above offers some optimism. However, if price does indeed break 2.000, then expect a drop to the 161.8% Fib extension at 1.645.