Last week’s we had an explosive end to the Litecoin and Namecoin rallies. But the rest of the altcoin market help up reasonably well with PPC and BTC continuing to stay in an (albeit weak) uptrend. That changed today when Peercoin ended its run as well and bitcoin got within $13 dollars of ending its rally. The key level for bitcoin is $260 dollars, a decisive move below here should end its uptrend too.
Namecoin Falls Below 62 Cents
The Namecoin rally ended on a break below the support at 62 cents. By July 10th and July 11th, when the sharp correction transpired, prices have carved out a nice support near $0.618-$0.64. The crash took out this level and closed out the uptrend. While NMC/USD did have a dead cat bounce in the following days, today we got more confirmation with prices taking another tumble below $0.60. We are currently quoted at 58 cents per coin.
With the rally now over, what’s next for NMC? Some support can be found at the July 11th swing low at $0.558. Today we bounced right at this level ($0.556 to be exact) and Namecoin had a small 2.3 cents move higher. Below this level, the round $0.50 mark may also act as support. This is followed by an important support area composed of the swing low at $0.453 and the April 16th swing high at $0.461. A decisive break below 45 cents may trigger a downtrend for Namecoin.
But given the recent end to the rally, caution should be exercised. Strong rallies like the one we just had are not usually followed with an immediate price reversal and a new downtrend. Preferably we would like to see a period of stabilization before the next leg down commences. On the higher end, the bulls will need to push prices above the $1.30 swing high to restart the upmove. This doesn’t seem likely, unless bitcoin stages a major reversal and pulls the altcoin market higher.
Peercoin Ends Rally as Well
Peercoin is the 3rd major altcoin to end its rally with a blowout top. The crypto surged to a high of $1.027 last Friday, only to be met with heavy selling in the following days. The support area to watch stretched from the 52 cents swing low to the round $0.50 figure, and it got taken out today. The selling hit a low of $0.465 and we are currently trading at $0.486.
Similarly to Namecoin, a restart of the rally will require a break above the swing high at $1.027. On the lower end, important support can be found in an area between the $0.468 swing low and the $0.46 swing high. Today we got our first bounce at this support after a low of $0.465 was hit. Prices recovered somewhat after hitting this area. Lower still, more support can be found at $0.376, followed by the round $0.30 mark. While a break below the $0.376 low would technically constitute as a new downtrend, caution should be exercised, as we noted above for Namecoin. Markets rarely ”switch” from uptrend to downtrend with no pause in between.
FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage, 30% margin call, 0.01 lot minimum transaction size with no maximum — at your service. Open your trading account now or learn more about making your money go further with FXOpen.
*Cryptocurrency CFDs are not available to Retail clients in the UK