BTCCNY Price Technical Analysis – Profit-Taking at 5000?

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BTCCNY has staged another bullish run, similar to the strong upside rally seen in the last week of May. Price is now setting its sights on the next major ceiling at 5000.00, at which profit-taking might be seen.

If so, a pullback to the nearby support areas could take place, offering an opportunity to buy on the dips. RSI is already indicating overbought conditions so buyers are feeling tired and ready to lets sellers take over. Similarly, stochastic is in the overbought area but hasn’t crossed down to show a return in selling pressure.

With that, BTCCNY could have enough energy to go for more gains in the next few days. Financial market uncertainties, among which are the FOMC statement and EU referendum, are encouraging investors to seek alternative investments and profit opportunities apart from fiat currencies.

In addition, data released from China has been mostly weaker than expected. Industrial production was stuck at 6.0% versus the projected improvement to 6.1% while fixed asset investment slumped from 10.5% to 9.6%. Retail sales also ticked lower from 10.1% to 10.0%.

Once again, this gave rise to speculations of rate cuts or central bank easing from the Chinese central bank, leading investors to worry about a weaker yuan. Chinese traders also moved funds out of Chinese equities for fear of another sharp drop or potential capital controls from the government.

In turn, these traders put their funds in bitcoin, therefore driving BTCCNY prices significantly higher. Further upside pressure is expected in the coming days as the event risks loom and the prospect of a Brexit lures European traders away from their own fiat currencies as well.

Still, a lot of volatility is to be expected especially once these events unfold and possibly bring risk-taking back in the financial markets.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.