BTCCNY is trending higher on its short-term and long-term time frames, exhibiting a potential buy opportunity at the bottom of its 4-hour ascending channel. Price seems to be bouncing off support at the 7000.00 area and could be poised to test the highs at 7600.00 or move up to the top of the channel at 8000.00.
Headlines on the government crackdown on bitcoin activity seem to have taken the back seat these days, as there have been no major penalties or regulations announced over the week. Still, investors remain wary that another big move could be in the cards once BTCCNY price tests new highs and attracts increased market interest.
In the absence of that, BTCCNY remains supported as there are geopolitical uncertainties weighing on markets elsewhere in the globe. In Europe, concerns about Italian and Greek debt are keeping speculations of capital controls in play and these have led to strong demand for bitcoin in the past. French politics are also throwing additional uncertainties to the mix as a potential victory by Le Pen could give more weight to Frexit concerns and threaten the stability of the region and shared currency.
The 100 SMA is above the longer-term 200 SMA on this time frame so the path of least resistance is to the upside. This means that the rally is more likely to continue than to reverse. However, the gap between the moving averages is narrowing so a downward crossover could be possible. Stochastic is also moving south, which reflects a potential pickup in selling pressure as well. In that case, a break below the 7000.00 mark could confirm that a downtrend is underway.
For now, the 100 SMA seems to have held as a dynamic support level and is keeping losses in check. A break below the channel support could also lead to a test of the 200 SMA dynamic inflection point at 6400.00, which is also an area of interest.
RSI is turning lower to show that sellers are trying to regain control of BTCCNY price action. Stochastic is also making its way out of the oversold zone also to show a potential pickup in bearish pressure. At this point, traders appear to be on the lookout for any reports from China’s bitcoin industry to gauge whether or not the gains can be sustained.
Overall, market fundamentals still seem to signal further upside for bitcoin but it’s hard to predict how headlines could impact price action from here. Recall that any restrictions from the Chinese government have led to a massive drop in price, although the cryptocurrency has managed to slowly crawl back higher as pressures abate.