Since the start of the month, Namecoin, like a lot of the crypto currencies, has been heading south, virtually month after month. There are hints that a retrace could be on the way.
Let’s take a look at LTC/USD on a higher timeframe, in this case the Weekly, to try and gauge a longer term picture of what may occur in the coming weeks (click to expand):
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I’ve performed the Fibonacci study from the high of the year at 8.7 (at the start of 2014 actually), until the low of this year at 1.340, back in early April.
First thing we notice is how price, from the low at 1.340 retraced to the 23.6% Fibonacci level at around 3.1, marked in red, (with the wick managing to reach 3.3.). Since then however, it’s been a familiar story, with price falling back down some distance.
Right now, the bears are trying to push below 2.000, a natural psychological support zone, it remains to be seen if that can hold for much longer. Concerning the candle prior to this week’s in formation, you’ll notice it is a bullish spinning top, with an extremely small body, which may signify a potential retrace. Indeed, this week’s candlestick range is likewise tight too, (albeit this could change of course since we’re not even in midweek yet). And there is some more hope for the bulls, mainly due to two key technical indicators. Firstly, we have the Stochastic Oscillator in an extremely oversold territory, whilst the %K has crossed above the %D, with both of them starting to climb north. Secondly, the Accelerator has turned green since last week. Ideally I’d want the Awesome to turn soon to help confirm my judgement, although this could be a while away yet.
Essentially, I am of the opinion that the low of this year at 1.340 shall hold firm this Summer, and we could possibly see a re-test of 23.6% at above 3.000 later within a few weeks time.