BTCCNY is still on a steady uptrend and safely inside its ascending channel formation on the 1-hour time frame. Price was rejected on its test of the channel resistance and seems to be aiming for the channel support at 4480.00 once more.
The 100 SMA coincides with this channel support so a bounce could be due. In addition, the short-term 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside.
However, RSI appears to be on the move down for now, indicating that sellers are in control of price action. Stochastic is also heading south so BTCCNY might follow suit, taking it down to the channel bottom. If a bounce takes place, price could head back up to the top at 4600.00 or higher. On the other hand, a break lower could lead to a test of the 200 SMA dynamic support at 4450.00, which also lines up with an area of interest.
Renewed risk appetite thanks to strong US earnings data has led traders to flock to traditional investments again, dumping their bitcoin holdings in the process. Speculations of additional stimulus or easy money from the likes of the RBNZ, RBA, ECB, and BOJ are also keeping risk-taking in play.
Also, reports are showing that the Chinese government is easing the red tape in order to spur investment activity. This could lead to an influx of funds back to the Chinese stock markets and the yuan, forcing bitcoin to retreat from its recent rally. After all, data from the Chinese economy came in mostly stronger than expected last week so fears of a slowdown have subsided.
With that, there is potential downside for BTCCNY, depending on how long this type of market sentiment lasts. Price seems to be having trouble sustaining its climb anyway, although a return in risk aversion could spur demand for bitcoin once more.
This article, BTCCNY Price Technical Analysis Ready for a Channel Bounce!, first appeared on ForexMinute.