BTCCNY is on a strong climb, moving inside an ascending channel on its 4-hour time frame. Price is currently testing the resistance and might be due for an upside breakout or another move back towards support.
A break past the 4400.00 resistance could set the stage for a sharper BTCCNY climb while a selloff could lead to a drop to 4200.00. The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. Also, the gap between the moving averages is widening so bullish pressure is picking up.
However, RSI is heading south so sellers might be in control of price action for now. A candle closing below the near-term consolidation bottom at 4300.00 could confirm that a short-term selloff is due. Stochastic is also pointing down to show a potential return in bearish momentum. If sellers are strong enough, they could push for a break below the channel support and the dynamic inflection point at the 200 SMA.
China has another round of top-tier releases lined up for the week, particularly its GDP and industrial production numbers due Wednesday. Stronger than expected readings could reinforce yuan strength against bitcoin while downbeat results could lead to a selloff or a BTCCNY upside breakout.
Analysts are expecting the quarterly GDP to show another 6.7% growth figure while industrial production might improve from 6.3% to 6.4% year-over-year in September. Retail sales could pick up to 10.7% while fixed asset investment could also tick higher.
Other event risks for the week include the ECB decision, BOC monetary policy statement, and a number of major reports from the UK. Stronger odds of a hard Brexit could weigh on market sentiment and lead traders to liquidate riskier holdings like bitcoin in favor of currencies such as the yuan and the dollar.
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