BTCCNY Technical Analysis – Breakout Correction Complete?

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BTCCNY has been climbing recently but price could be ready to resume its selloff at this Fib level. Price has previously broken below a triangle consolidation pattern visible on the daily time frame and appears to be completing its correction from the drop.
If so, BTCCNY could head back to the swing low at 3200.00 or push for more losses. The 61.8% Fib level lines up with the broken triangle support zone around 4050.00 and might continue to keep gains in check.
However, the 100 SMA is above the longer-term 200 SMA so the path of least resistance is still to the upside. The gap between these moving averages is widening, too, which means that bullish pressure is getting stronger.
Meanwhile, RSI and stochastic are starting to head south from the overbought zones so bitcoin price might follow suit. So far, the 100 SMA appears to be holding as a dynamic resistance level but a candle closing past this area would confirm that buying pressure is still present.
Data from China has been mixed, as last week’s trade balance showed healthy gains in imports and exports. CPI, on the other hand, fell short of expectations. Earlier today, retail sales and industrial production came in better than expected, reviving positive expectations for the world’s second largest economy and the global economy as well.
More signs of a pickup in China could reinforce demand for the yuan, driven mostly by gains in yuan-denominated securities. Stronger stock market gains in China could encourage investors to move money out of bitcoin and onto the local stock market, provided the government refrains from devaluing the currency. Aside from that, risk off moves in the financial markets could also weigh on the riskier bitcoin.
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.