Bitcoin’s ‘unstoppable’ rally is finally taking a break on Christmas eve. Bitcoin price against Chinese Renminbi was consolidating today after 5 consecutive days of uptrend. For the past two days, the BTC had successfully gained around 10%. Most of the frenzy buying were believed to generated from China. From the tabulated data from cryptocompare.com, CNY-denominated transactions were as high as 98% on the total volume of bitcoins deals. Most of it was done through the three major exchanges based in China, BTCC, Huobi and OKCoin.
At the moment, the price of BTCCNY is retesting on 50-day moving average(MA) line after moved below it in earlier today. Furthermore, the price managed to floated back on top of 200-day MA on the strength of BTC and the weakness of CNY. The stochastic and RSI went up and still hovering on max of overbought zone for the first time today.
The slowing down consolidation channel due to profit-taking and cashing-out by major miners are expected after days of sharp rises. BTC is undeniably in super bull run cycle. If it is able to hold on between 6500-6580, we could still witness another possible swing towards 6800 in next month just in time for the Lunar new year. The momentum by then could dry up as Chinese preparing for their new year holiday.
The consolidation movement is shaping a bullish pennant tendency. After price soften along the slope, the candles followed were on the up side. If it managed to form the pennant above 50-day MA, we could yet see another big upward swing. The immediate target should be on the key resistance at 6525 before another test on the rejected peak point of 6608.
In the immediate term, investors are still weighing on the USD impact on BTC. The China authority capital control has helped bitcoin’s value surpassing silver total values and closing in to parity of gold price. The accumulation of bitcoins is still surprisingly healthy based the BTCC’s order book data. BTCC is currently the world’s biggest BTC exchange which mainly serves mainland clientele. The trend could keep tracking the weaknesses of yuan going to the new year. Moreover, Bitcoin is increasingly attractive as investment since US dollar are costlier and the falling of gold price.
The Chinese seems are to keeping their champagne close for now, as they are still busy grabbing more Botcoin. And their passion in digital coins could extend to other altcoins.
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Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.