PPC/BTC Technical Analysis – 27th March 2014

Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator. Peercoin vs Bitcoin seems

Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.

Peercoin vs Bitcoin seems to be following a slow downtrend since the start of the week, but there could be a pause due to some important technicals.

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Let’s take a closer look at the PPC/BTC four hour chart below (click to expand):

ppcbtch4_27_03_2014

I’ve performed the Fibonacci study from the low of the year at 0.00445 to the latest swing high at just under 0.005 on the 21st of this month.

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The first thing to mention is how, since Monday, there’s been an attempt by the market to escape the Bollinger squeeze. Price action might seem choppy, but it’s clear that the bears are steadily gaining the upper hand against the bulls.

This has been initiated by a very bearish candle, circled in red. As we can see, it has a long upper wick, which is entirely contained outside the upper Bollinger band. Secondly, there is virtually no lower wick to speak of. So on its own, this candle portrays strong bearish price action. Then, we also have the Accelerator Oscillator turning red on that very same candle. Within a couple of candles, we also had the Stochastics crossing down, safely above oversold territory.

What’s interesting is, even though price action wasn’t as smooth as one would have liked, the majority of Awesome Oscillator’s bars have closed as red. This although rare, does happen from time to time, where you’re seeing choppy price action, but a lot of bull or bear Awesome bars, which usually means an effort to form a trend is in process, even if it may not come into fruition. In this specific situation, it’s hard to ascertain whether this turns out to be the case, due to conflicting technicals; primarily the current geometry of the Stochastics, since they’re now actually in oversold territory and have just crossed upwards.

Right now, price is hugging the 61.8% Fibonacci retracement level. With the AC and AO still showing signs of bearishness, it seems price could still continue down, but I fear the 78.6% Fib retracement level along with the aformentioned reversing Stochs, may prove one step too far.

However, if there is a break of the 78.6% level at 0.00455, then we could see a further drop approaching the year low.

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