BTCCNY was previously trading inside a descending triangle pattern, as price formed lower highs and found support at 3960.00. Bitcoin eventually broke past the triangle resistance, indicating that the consolidation is over and that bullish momentum has won over.
Price is currently moving inside a bullish flag pattern after the breakout, and a break past the top of the formation around 4050.00 could put BTCCNY on track for prolonged gains. The chart pattern is approximately 250.00 points high so the resulting rally could last by the same amount.
The 100 SMA is below the 200 SMA for now but the moving averages are edging closer together so an upside crossover could be due. In that case, bullish momentum could pick up even more, allowing bitcoin price to aim for the next resistance levels.
Oscillators are painting a different picture, though, as both RSI and stochastic are heading south. This suggests that buying pressure is weak and that sellers are taking over. This could lead to a pullback to the broken triangle resistance before BTCCNY resumes its climb. Price could find support at 4000.00 from here or at the dynamic support around the moving averages.
Profit-taking seems to be happening in Asian markets ahead of the 7-day long Chinese holiday so investors might be ramping up demand for cash. Apart from that, it’s also the end of the month and quarter by the end of this week, which means that reversals from the previous trends could be seen.
Demand for bitcoin also rose ahead of the US presidential debates, with traders seeking alternative securities to avoid event risk. The US dollar has slid lower to the bitcoin ahead of the event while equities closed in the red, although the outcome of the debates seems to favor Clinton and a return in risk appetite later on.
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