BTCCNY made a rally leading up to the weekend once more, as more traders moved funds out of traditional assets with this week’s event risks. The EU referendum is set to take place on Thursday and, depending on the outcome of the vote, BTCCNY could make another strong breakout.
A vote to stay in the EU could mean a return of risk appetite in the financial markets, leading investors back to equities and dumping bitcoin in the process. On the other hand, a Brexit could lead investors to put more money in bitcoin, anticipating further uncertainty in the global economy. This scenario could bring more volatility to the currency markets and more losses for stocks.
In terms of technicals, the moving averages are hinting that the rallies could resume since the 100 SMA is above the 200 SMA. Also, the gap between these SMAs is widening so this means that bearish pressure is getting stronger.
However, stochastic and RSI are both on the move down and BTCCNY might follow suit. This means that sellers are still in control of price action until the oscillators start indicating oversold conditions.
A breakdown from the triangle pattern could set off a drop to the area of interest around 4500.00, which might act as near-term support. A move below this area could lead to a test of the next floor around 3800.00-4000.00.
Meanwhile, an upside breakout from the consolidation pattern could spur gains until 6000.00 or onto 7000.00 if buying momentum is strong enough. Either way, price could spike around during the actual referendum before establishing a clear direction so it might be best to wait for the official results to be published first.
No other event risks are lined up for the week but the threat of currency intervention among Japanese government officials could also discourage traders from putting money in the yen as well.