Trade Recommendation: Namecoin
The Namecoin/Bitcoin pair lost all bullishness on June 23, 2017 when it generated a lower high at 0.001388. It may not be easily recognizable in the chart, but the lower high created a bearish head and shoulders structure. The market effectively went in a downtrend when it broke critical support at 0.00085 on July 19.
The pair nosedived as it broke support levels at 0.0005 and 0.00033 with little trouble. Eventually, it established support at 0.00017 in October. The market consolidated at that level until a spike in price and volume on December 13 brought it back to life. In one month, the market managed to go as high as 0.00059048. As expected, bears took advantage of the ascent as they dumped shares and took profits. The market retreated, which is a good chance for you to buy cheap.
Technical analysis show that the pair is creating a bullish higher low at 0.00033. In addition, the Bollinger bands are starting to contract. This is a sign that the consolidation period is almost over. Also, the decline in volume in the last eight days indicate that selling pressure is deflating. If selling is weak, then that forces buyers to drive prices up.
The strategy is to buy as close to 0.00033 support as possible. We are playing for the bounce so our target is resistance at 0.0005.
Daily Chart of Namecoin/Bitcoin on Poloniex
As of this writing, the Namecoin/Bitcoin pair is trading at 0.00033969 on Poloniex.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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