Bitcoin and most cryptocurrencies stabilized after the large losses experiences last week. In BTC/USD prices are hovering around the $200 round figure, Litecoin is flirting with $1.30 and Peercoin is trading near 30 cents per coin. We expected this development, in our last update we wrote that the selling is likely overdone. Cryptos formed large V-shaped reversal patterns last week, indicating that losses are over, at least in the short-term. We also cautioned our readers that longs would be dangerous here due to the still prevailing long and medium-term downtrends.
Bitcoin Trading Around $200 per Coin
Big Brother Bitcoin has been trading above and below the $200 mark for the past few days. The top of this newly formed congestion area stands at $226 and the bottom is at $192.57.
But a break of both of these levels should be treated with caution. For one, a five days rangebound period doesn’t seem long enough, especially after the substantial losses experienced last week. The risk is that a brief break above $226 would be met with sellers looking to reignite the downtrend. To prevent this, look at a much more defined resistance level, the $266 mark. We’ve mentioned the importance of this level countless times before. Recently $266 per coin was the starting point for bitcoin’s most recent crash to $162. If BTC prices can climb back above $266, bitcoin could rally further. On the downside, a move below the January 15th swing low at $162 would likely start a new downtrend.
Namecoin Weaker but Fate Tied With Bitcoin
Alternative cryptocurrency Namecoin is trading weaker compared to other cryptos. While BTC is stuck around $200 per coin and Litecoin trades near $1.30, NMC just fell over 10 percent from $0.450 to $0.404. We are currently quoted not far from the daily lows at $0.406 per coin.
I can’t find any news that would justify the move (yet) so I will treat this as a technical break for now. A NMC/USD break below the January 15th swing low at $0.379 may lead to more losses BUT be very careful shorting any cryptocurrency in this environment. Bitcoin has stabilized above the $200 mark and in the short-term BTC prices can go either up or down. If big brother rallies, Namecoin will (eventually) rally with it and any sellers may be caught with their pants down. Notable NMC resistance levels on the upside include the half parity level at $0.50 followed by $0.55. A Namecoin move above $0.55 could spark a new rally.