After a steady rise over the past few days, Peercoin vs Bitcoin has retraced quite some distance. Will the bears continue to take hold?
Let’s take a closer look at the latest PPC/BTC chart on the four hour timeframe (click to expand):
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I’ve performed the Fibonacci study from the low of the week at 0.00458, until the high of the week at 0.00515.
I want to concentrate on the cluster of candlesticks marked in a white ellipse. Notice how these candles were all merely swimming along the x-axis, i.e. time, not increasing in price. This was in part due to the middle Bollinger line, which in many cases can act as a support/resistance line, in this case resistance. The effect is even more noticeable as the middle Bollinger band itself was horizontal. Despite this, the Awesome Oscillator remained green throughout this period of consolidation (marked with a blue arrow), which is quite surprising, but gives us a vital piece of information – the trend wasn’t necessarily over, but merely catching it’s breath – a viewpoint enhanced by the fact that many other technicals were also giving us bullish signs, such as the Stochastics still heading north, and the Parabolic SAR still beneath the candles.
The trend continued until this morning at around 6am GMT, where price reached a week high of 0.00515. Take a look at the candle circled in red, it’s a very thin spinning top, essentially a doji, that opened/closed above the upper Bollinger band, which helped us identify a potential reversal, since this pattern is frequently associated with reversal precursors. And indeed, within the next couple of candles, the house came falling down, with a multitude of indicators telling us to sell, such as the Stochastics crossing down from an (almost) overbought position, the Parabolic SAR above the candles, the AO and AC turning red. With so many bearish signs coinciding like this, don’t be surprised to see a strong about-turn.
Right now price is hovering around the 61.8% Fibonacci retracement level at 0.0048. I doubt 61.8% can hold, even if the Accelerator has turned green, due to the bear momentum exuding from all the other indicators.