With bitcoin once again grabbing headlines, trader and investor focus has been squarely on the leading cryptocurrency this week, resulting in very little volatility across the altcoin space. There is an event of note in one coin however, an event that could present traders with a nice opportunity for an intraday profit. That coin is namecoin, and here’s what you need to know.
First, lets take a quick look at recent price action. The NMCUSD suffered the same levels of volatility as its peers throughout the latter half of last week, but has since settled. Throughout this week the pair has traded within a relatively tight downward sloping channel. spending Tuesday, and Wednesday so far, below its 200 period SMA on the 20 minute intraday chart.
The decline has drawn the pair close to last week’s key support at 2.351, which is the level to watch today. Last time the pair hit this level (April 19) it gained nearly 20% in a matter of hours, and under the assumptions of classical technical analysis, the same could happen on today’s retest.
The pair is currently trading just shy of its sloping channel resistance, so expect a decline as the US markets open for business. A 10 cent drop would bring the aforementioned support into play, and a failed retest of this support would validate an intraday bullish technical bias.
Such a scenario would offer up an initial upside target of weekly friction zone at 2.581, and beyond that, look for a similar sized correction to carry the NMCUSD towards weekly highs at 2.764.
As ever, a fundamental event has the potential to shift sentiment in an instant, so keep a sharp eye on the cryptocurrency news to preempt such a shift. Tight stop losses just below the key support would offer a nice exit point if the bullish technical bias turns out invalid.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com