BTCCNY Price Technical Analysis – Buy on the Dips!

0
51

BTCCNY is sliding lower right now but it is approaching a key support zone that could trigger a bounce. Price is still inside its ascending channel formation visible on the 1-hour time frame.

Applying the Fib tool on the latest swing high and low shows that the 61.8% level coincides with the channel support around 4850.00. This is also near the dynamic inflection points at the moving averages and a former resistance level which might now hold as a floor.

The 100 SMA is crossing above the 200 SMA to show that the path of least resistance is to the upside. Once this crossover is completed, more buyers could return to the game and push for a continuation of the climb, possibly until the swing high at 4985.00 or higher.

RSI is on the move down, which means that sellers are still in control of price action for now and that the correction hasn’t finished. Stochastic is also heading south so BTCCNy could follow suit. Once the oscillators turn up from these oversold levels, sellers could allow buyers to take the wheel.

BTCCNY Price Technical Analysis - Buy on the Dips!

On the other hand, a break below the support levels could represent a significant surge in bearish pressure, likely indicating that a reversal from the ongoing uptrend is due. This could bring BTCCNY down to the next floor around 4700.00 or lower. Catalysts that could cause this include any updates from the Chinese government on how they plan to curb bitcoin trading in the mainland.

Recall that Chinese investor activity has mostly been responsible for propping bitcoin price against the yuan, as traders are seeking to hedge against a depreciating local currency. Even if they are reaping gains from stock market rallies, the falling value of the yuan is eroding their profits. With that, investing in another asset against yuan is allowing them to make up for those losses.

However, monetary authorities in China are reportedly not happy about this activity since it limits their power to control the currency. Rumors swirled that they are considering restricting buying or selling of bitcoin in the domestic economy, but analysts were quick to note that this is difficult to implement due to the nature of the bitcoin network.

For now, it seems as though shifting market sentiment is also taking its toll on BTCCNY. Bitcoin enjoyed a strong surge after the US elections on market uncertainty but the recovery in global equities has restored a bit of calm. After all, Trump did promise reforms that might benefit US companies and the fact that both Houses are under Republican control signals that these policy changes might be passed smoothly.

For now, the ongoing trend in BTCCNY could persist, barring any significant changes in market sentiment. Keep in mind, though, that volatility tends to surge over the weekend on profit-taking and in reaction to headlines before the markets reopen. The uptrend remains intact on longer-term time frames still, so the path of least resistance is to the upside on those charts as well.

SHARE
Previous articleBTCUSD Price Technical Analysis: Reversal Signal Spotted!
Next articleChronoBank Does Its Bit for the Much Needed Economic Revolution
With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.