Bitcoin’s inability to break out of its range had a stabilizing influence on altcoins. Both Peercoin and Namecoin have formed new congestion areas that may (in the future) become staging grounds for a breakout either up or down. Namecoin is trading between $0.44 and $0.50 while PPC has been locked between $0.30 and $0.375 per coin.
Peercoin Follows Big Brother
Alternative cryptocurrency Peercoin followed bitcoin first higher then lower as both cryptos experiences two false breakouts. This led to the establishment of the new range boundaries at $0.30 on the bottom and $0.375 on the top.
A note of caution however. The range is still young and any breakout should be treated with suspicion. The possibility for false breakouts is high, as evidenced by the two previous instances in the last week alone. A few more days spent tucked inside the range should improve the odds for a breakout.
What are some of the important PPC levels if we get an upside breakout? The first important mark can be found at the half-parity level ($0.50), followed by December 29th swing high near $0.60. Higher still, the previous support area between $0.70 and $0.73 may now turn to resistance on the way up. In case of the downside breakout, the first level to take note of is this year’s low at $0.24. A Peercoin move below here may exacerbate the losses.
Namecoin Trades Between $0.44 and $0.50
Namecoin has formed its own congestion area. The high stands at $0.50 and the low is at $0.44. We are currently trading right in the middle of the range at $0.469.
What we said about Peercoin applies here as well. Treat any breakouts with caution until the range matures. Important levels on the upside include $0.55, followed by the January 26th swing high near $0.65. Higher up, the round $0.70 figure and $0.75 may also act as resistance. On the downside, notable levels include weak support at $0.40, followed by this year’s low at $0.379. A NMC/USD break below $0.379 should restart the trend lower. As usual, whenever trading cryptocurrencies you should always watch big brother bitcoin. Altcoins will often follow BTC moves higher/lower.
Silk Road Trial Ends
A jury found the defendant Ross Ulbricht guilty on all counts of being “Dread Pirate Roberts” the mastermind behind the Silk Road drugs marketplace. The FBI still has possession of 94,000 coins seized during Ulbricht’s arrest. Under a deal with the defendant, law enforcement authorities previously auctioned off about 50,000 BTC belonging to Ross. The verdict should open the way for a new bitcoin auction but I don’t know if the decision compels the USMS to immediately liquidate the stash. Nonetheless, it’s a risk factor to keep in mind if you’re long, or just holding BTC. The announcement of previous auctions has led to sharp falls in the price of bitcoin and other cryptocurrencies.