BTCCNY could be in for a downtrend as a double top pattern materialized on its 4-hour time frame. Price failed in its last two attempts to break past 3950.00 and is gearing up to test the neckline at 3750.00.
A break below the neckline could confirm the uptrend reversal signal and send BTCCNY lower by 200.00 or the same height as the chart formation. The 100 SMA is below the 200 SMA on this time frame so the path of least resistance is to the downside. Also, the short-term moving average appears to be holding as a dynamic resistance level at the moment.
Oscillators are painting a different story, though. RSI seems to be on its way up from the oversold region, indicating that buying pressure could return. Stochastic is also on the move up, hinting that BTCCNY could make another attempt to test 3950.00 or even break higher.
The main catalyst might be the Jackson Hole Symposium, particularly Fed head Janet Yellen’s testimony. FOMC policymakers have been giving hawkish remarks recently but the minutes of their earlier meeting suggested that they would rather sit on their hands and wait for more data before tightening.
Any indication from Yellen herself that the Fed could still have a rate hike up its sleeve for this year could bring risk aversion back to the markets, thereby weighing on bitcoin price. So far, the cryptocurrency seems to be following the movements of commodities and equities, which suggests that risk-off moves could be bearish for bitcoin.
As for the Chinese economy, the PBOC recently doled out a new batch of reverse repos, likely intended to stimulate lending and investment activity. This could manifest in stock market gains, which might add to bullish pressure for the yuan.