BTCCNY Technical Analysis – Making a Quick Correction

By August 14, 2016Bitcoin Business
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BTCCNY Technical Analysis – Making a Quick Correction
BTCCNY recently broke below the support at 3900.00 and dipped to the 3750.00 level before showing signs of a pullback. Applying the Fib tool on the latest swing high and low shows that the 61.8% retracement level coincides with the area of interest, which might now hold as resistance.

The 100 SMA is crossing below the longer-term 200 SMA to show that the path of least resistance is to the downside. These moving averages are just slightly above the Fibs and area of interest, so these could be the line in the sand for any corrections.

Stochastic is still on the move up to show that profit-taking from the recent slide is happening. RSI is also heading north so BTCCNY could have room to pull up higher. Once these oscillators reach the overbought regions and turn lower, selling pressure could return and push price back to the swing low.

Economic data from China was mostly weaker than expected last week, as industrial production, retail sales, and fixed asset investment all posted declines and fell short of estimates. This reinforced fears that the world’s second largest economy is still in a rut and may drag global demand lower in the next few months.

Even so, the yuan managed to hold on most of its recent gains before bouncing off the 3750.00 lows at the end of the week. So far, there hasn’t been much talk of stimulus from the Chinese central bank or devaluation from the government. In fact, the Chinese currency was allowed to appreciate briefly recently to celebrate the anniversary of its devaluation.

Moving forward, market sentiment could continue to dictate BTCCNY price action since there are no major reports due from China. Risk off moves could weigh on the riskier bitcoin but more signs of global economic weakness could lead traders to seek higher returns from the cryptocurrency.

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