BTCCNY bounced off the area marked in blue as predicted in the previous article. This area of interest lined up with a former resistance level and has now held as support, indicating that BTCCNY is set to resume its climb.
The 100 SMA is above the longer-term 200 SMA, confirming that the path of least resistance is to the upside. This could put bitcoin on track towards the previous highs at 5175.00 and beyond, especially since risk aversion is set to make a strong comeback following the Brexit vote.
In addition, RSI and stochastic have climbed out of the oversold regions, indicating that buyers are taking control of price action. Bullish divergences were also made, which means that buying pressure has built up significantly.
The UK has voted to exit the EU in this week’s referendum, exposing the region to financial and economic uncertainties. This could further discourage traders from putting money in equities and currencies since central bank policymakers might scramble to put stimulus measures in place to prevent their economies from crashing.
With that, demand for bitcoin could continue to rise now that stock markets and higher-yielding currencies are giving up a lot of ground. This economic weakness is likely to spill over to the global economy, including China, possibly prompting their government and central bank to impose capital controls or attempt to weaken their currency, driving even more investors to put money in bitcoin.
Developments in the bitcoin industry are also increasing the virtual currency’s appeal, as more retailers and financial institutions have been warming up to the idea of integrating bitcoin in payments systems. Moving forward, increased uncertainty in the global economy could continue to keep the cryptocurrency supported unless any major intervention efforts are made.