BTCCNY suffered a sharp drop following reports of a hacking incident in Hong Kong bitcoin exchange Bitfinex. However, price bounced off a long-term area of interest and appears ready to resume the climb.
On the daily time frame, BTCCNY is still above its long-term rising trend line, which held as strong support on the recent drop. It also coincides with an area of interest or former resistance around the 3000.00 major psychological level. If this holds as support, BTCCNY could make its way up to the highs at 5000.00 or at least until the nearby area of interest at 4000.00.
The 100 SMA is above the 200 SMA so the path of least resistance is still to the upside. In addition, the 200 SMA lines up with the support area, adding to its strength as a floor. The gap between the moving averages is widening, which suggests that buying pressure is getting stronger.
Meanwhile, stochastic is starting to turn higher, also to indicate a return in bullish momentum. A bit of bullish divergence can be seen as the oscillator made lower lows while price had higher lows. RSI is heading north as well so BTCCNY might follow suit.
Traders could flock back to bitcoin as a fresh batch of uncertainties unfold in other financial markets. The Bank of England is set to announce its monetary policy decision, possibly leading other central banks to pursue accommodative policies sooner or later, while the US NFP report could revive talks of a Fed rate hike in September.
Meanwhile, the Chinese economy remains feeble as their manufacturing and services PMIs are struggling to stay in expansion. This could also prompt yuan devaluation measures and capital controls from the Chinese government, discouraging traders from putting money in local markets.