Bitcoin Price Key Highlights
- Bitcoin price is having trouble recovering from its recent tumble, as investors are wary of Chinese government action.
- Price is still trending higher on the longer-term time frames and is safely above the support region on the daily chart.
- Technical indicators are also hinting that the uptrend could resume at some point.
Bitcoin price is still under significant downside pressure at the moment, thanks to the Chinese government’s warnings to bitcoin exchanges.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA on the daily time frame of bitcoin price, so the path of least resistance is still to the upside. In addition, the 100 SMA is close to the rising trend line connecting the lows since August last year, adding to its strength as a potential floor.
Stochastic is heading south but appears to be making an upward crossover, possibly allowing bullish momentum to return. RSI is moving lower, though, so bitcoin price could follow suit and go for a test of support around $800. A break below this region could mark the start of a downtrend, especially if bitcoin price trades below the 200 SMA around $700.
Much of the recent slide in bitcoin price can be attributed to fresh action from Chinese authorities who have been seeking to curb offshore investments and revive domestic demand. The PBOC has already intervened in the currency market to punish those who are betting that the yuan would continue to tumble.
More recently, the Chinese government issued a warning to major bitcoin exchanges, citing their need to comply with relevant laws and regulations. In the statement, the government reiterated that bitcoin is not currency and that there are risks in making this investment. The central bank moved to restrict how exchanges can acquire new customers so investors in the mainland are wary about how this can affect their current holdings, leading some to liquidate their long positions recently.
In particular, bitcoin exchanges are being forced to comply with AML and KYC requirements so some firms have backed out of marketing activities that focus on the advantages of cryptocurrencies over traditional assets.
Charts from SimpleFX
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