BTCCNY Technical Analysis: Slow and Steady Climb

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BTCCNY is slowly moving higher inside a rising wedge formation and is testing resistance. A move back to the bottom of the wedge around 7200 could be in the cards if selling pressure returns. If bears are strong enough, they could even push for a break below support and a corresponding downtrend.

The 100 SMA is below the longer-term 200 SMA on this time frame so the path of least resistance is to the downside. This means that a downside break might be more likely than a bounce or a break higher.

Stochastic is moving up to suggest that there may be some buying momentum left, but the oscillator is already nearing overbought levels to show that buyers are getting tired and that sellers could take over. Similarly RSI is approaching the overbought area to indicate a possible pickup in selling pressure.

The wedge is around 700 points tall so a resulting breakdown could be of the same size. Nearby support is located at the 100 SMA or the 7000.00 major psychological level. A break below this area could set off a move towards the 6000.00 mark.

Bitcoin has been mostly supported against its peers but it remains in a weak spot in China. After all, there has been a lot of talk on potential regulation and authorities have previously made moves to restrict bitcoin trading activity in the mainland as part of their money laundering investigations.

However, BTCCNY remains supported due to moves by other countries such as Russia and Japan to accept they cryptocurrency. In the latter, the government recently announced that bitcoin would be accepted as a legal payment method. More recently, Russia also showed hints of accepting bitcoin as an official means of payment by next year. This would represent a big shift in their stance in the previous years wherein they even took action to restrict trading and information about bitcoin in the country.

Apart from all that, geopolitical risks are keeping risk aversion in play in financial markets, something that has proved positive for bitcoin as investors seek higher returns in alternative assets versus traditional securities like stocks, commodities, or currencies. Subdued concerns about the network hard fork have also renewed confidence in BTCCNY and has allowed it to recoup its losses from earlier in the year.

In fact, bitcoin is moving closer to testing its record highs and continued upside pressure might even lead to a break higher. Some catalysts for this would be acceptance of bitcoin in more countries or lower odds of tax reform in the US that would lead stock traders to put money in bitcoin instead.

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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.