So the day has finally arrived that Chinese banks are reportedly set to freeze the accounts of all Chinese bitcoin exchanges, and a number have confirmed they have received notices outlining the freeze. China’s most popular exchange however, BTC China, has said it has not yet received any notice, and Peoples Bank of China (PBOC) Governor Zhou Xiaochuan has been quoted as saying, “It is out of the question (banning bitcoin) as it was not started by central banks.” Was it all a ruse? If so, why have some banks received asset freeze notices? The answer remains unclear. One thing is for sure however, there will be some volatility across the cryptocurrency pairs on Tuesday.
What are the levels to watch in the BTCUSD? First, lets take a look at recent action. Having dipped into the weekend, the BTCUSD recovered throughout Monday’s trading and has opened Tuesday in much the same vein, reaching fresh two weekly highs as the European markets opened on Tuesday. The upside range (449.146-467.912) offers up a bullish technical bias, with in term support at 467.912 and fresh in term resistance now around 485.939.
A break above resistance would validate previous key support at 498.703 as an initial upside target. A close above this level would offer up April highs at 517.505 as a secondary target.
Bear in mind that the pair has just risen substantially, and as such, could well be due for a short term correction. Look for a failed retest of in term resistance to validate an upside bias.
Also, keep an eye on the fundamentals as the day matures. Both technically and fundamentally the current bias is bullish, but news out of China confirming the freezing of any exchange accounts could quickly reverse the bias. Keep tight stops below in term support to ensure you get out of a losing trade in the event of such a reversal.
To contact the reporter of this story; Samuel Rae at Samuel@forexminute.com