BTCCNY Price Technical Analysis: Poised to Break Out?

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BTCCNY price has been trending higher, moving inside a rising channel on its 1-hour time frame and hovering close to the resistance. However, buyers seem to be running out of steam as price is forming a consolidation pattern also.

Bitcoin price has formed higher lows and lower highs against the Chinese yuan, indicating that bulls are waiting for more cues before pushing it higher. At the moment, the cryptocurrency is supported by strong flows from Chinese investors who are seeking to hedge against their yuan-denominated holdings while the government moves to devalue the local currency.

The 100 SMA is above the 200 SMA for now but a downward crossover seems to be materializing, possibly drawing sellers to the mix. In that case, BTCCNY could break below the triangle support at 5200.00 and go for a test of the longer-term channel support at 5000.00.

On the other hand, a break higher could spur a test of the channel resistance at 5400-5450.00. Price is still trading close to the yearly highs and bulls seem intent on keeping BTCCNY afloat.

RSI is on middle ground, barely offering directional clues at the moment. However, the oscillator seems to be on the way down so selling pressure could persist. Stochastic is also turning lower without even reaching the overbought zone, which might be indicative of profit-taking before the long weekend, although this doesn’t really apply to Chinese markets.

Other monetary authorities and global leaders are turning their attention to the Chinese government’s moves to devalue the currency so traders may be on the lookout for potential measures to keep a lid on the yuan’s slide. Some have warned of capital flight from China as a result of this action, which might lead the government to impose capital controls.

In fact, rumor has it that the government has looked into ways to restrict bitcoin trading in the mainland but analysts have dismissed these potential regulations as nearly impossible to implement due to the nature of the bitcoin network and the blockchain.

In terms of cryptocurrency news, there have been no adverse updates pertaining to bitcoin so far, which suggests that the path of least resistance is to the upside, pending any profit-taking activity. Low liquidity over the Thanksgiving long weekend could result in more volatile price action after all.

Companies continue to report progress in integrating bitcoin to mainstream applications, with several firms applying for patents for their products. Apart from that, geopolitical risks looming on the horizon could continue to encourage traders to put money in bitcoin instead of stocks or currencies. For one, we’ve got the looming OPEC meeting which could have tremendous repercussions for the Canadian dollar and oil prices. Another high-risk factor is the potential political shakeup in Europe, possibly spurred by Italy’s referendum and France’s elections.

 

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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.