BTCCNY Price Technical Analysis – Approaching Major Area of Interest

By May 15, 2017Bitcoin Business
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BTCUSD Price Technical Analysis - Approaching Major Area of Interest

BTCCNY has stalled around its recent highs, signaling that it might be due for a large pullback before bullish momentum resumes. Applying the Fibonacci retracement tool on the swing low and high on the daily time frame shows the major correction levels.

In particular, the 61.8% to 50% Fibonacci retracement levels might act as long-term support since these span a former resistance area around $8000. This also lines up with a rising trend line connecting the lows since the start of the year. To top it off, it also coincides with the 100 SMA dynamic support.

The 100 SMA is safely above the longer-term 200 SMA for now, confirming that the path of least resistance is to the upside or that the uptrend is more likely to resume than to reverse. However, RSI is turning down to show that bearish pressure is kicking in, likely as traders are booking profits off the record highs.

Stochastic is also making its way down from the overbought zone to reflect a pickup in selling pressure. This might be enough to take BTCCNY at least until the 38.2% retracement level just above the $9000 mark. Once both oscillators reach oversold conditions and turn higher, buying pressure could return.

The bitcoin rally appears to be losing steam after the global cyberattack since perpetrators have demanded the cryptocurrency as ransom to unlock files. This reminds regulators and traders that bitcoin has been used to facilitate criminal activity in the past, thereby tainting its credibility that it has slowly shored up in the past couple of months.

Around that time, Japan implemented a law that recognizes bitcoin as a legal form of payment while the SEC reopened the COIN bitcoin ETF application up for review. The US regulator is set to announce its decision soon so the outcome could determine whether BTCCNY is in for a large pullback or a continuation of the steep rally.

In China, downbeat economic reports are drawing traders away from stock markets once more into offshore investments like bitcoin, something that monetary authorities are keen on avoiding. This has kept traders on edge for another round of crackdowns on potential money-laundering activity that would weigh on bitcoin volumes.

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