NMC/USD Technical Analysis – 31st March 2014

Namecoin drops from a high of 2.4 this morning, but retraces back to predictable levels, after applying essential technicals.

Let's take a closer look at the NMC/USD chart below. Today we're going to zoom right into the M5 timeframe, as this will provide a clearer picture concerning what's happening right now.

I've performed the Fibonacci study from the high of today at 2.4 to the low of today at 2.16, a drop of exactly ten percent, although this isn't exactly earth shattering news in the grand scheme of things when it comes to Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term' Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term.

As we can see, the fall from 2.4 was initiated from within a Bollinger Squeeze. The candle that began the fall marked in a red ellipse had a long upper wick, and at the same time, we had the Accelerator Oscillator and Awesome Oscillator as red, along with the Stochastics heading down from an oversold position.

If we look at where price stopped at 2.16, there was a very small candle that opened and closed entirely below the lower Bollinger band. In addition, by now, the Stochastic Oscillator was heading upwards with a clear, smooth trajectory. At this point, it would be wise to assume a possible retrace was on it's way.

As we can see, price actually rose to the 38.2% Fibonacci level at 2.25, (circled in white) where it remained for around 25 candles without even moving, eventually dropping to the 23.6% Fib level, at 2.215. Since then, price has been fluctuating between these two Fib levels (23.6% and 38.2%) for the past three hours. With the Awesome Oscillator showing strength for a number of bars now, we may see a rise to 50% later on, however, I expect the ranging to continue for the rest of the day.