Published
4 years ago on
January 02, 2020
Movements in the Chinese Yuan has historically had a major impact on the price of Bitcoin (BTC). Just recently when USD/CNY declined below the 21-day EMA, we saw a similar move in the crypto-currency market. Before that move happened a lot of investors in the crypto-currency market were very bullish on the price of Bitcoin expecting it to shoot towards $20,000 or higher levels. However, after that move the outlook quickly changed as the price decline sharply which led to a series of downtrends thereafter. Big whales and market makers from China have controlled the price of Bitcoin for a long time. Movements in the USD/CNY pair has influenced the price of Bitcoin because Chinese whales care a great deal about how the Chinese Yuan is performing against the US Dollar. Based on that, they decide whether to stay in Bitcoin or cash out in Chinese Yuan.
The USD/CNY pair has been in an uptrend since April of 2018. For this pair to break below a key trend line support and begin a new downtrend would be extremely devastating for the crypto-currency market. It is already hanging by a thread as it tests the 200 moving average again. If this level fails to hold and the pair falls below the trend line support then we would expect it to decline to 38.2% fib level at 6.816. If it declines even further than we would expect it to decline to the 61.8% fib level at 6.597. I would not be surprised if the price of Bitcoin declines well below $3,000 while this is happening. The US China trade war is still not settled and any developments on that front is very likely to have a major impact on movements within this pair. As the next election approaches, we are likely to see major movements is this pair mainly because of political rhetoric and posturing.
The daily chart for BTC/USD shows that the price has been printing lower highs and lower lows and is now ready to fall. The RSI has already run into a strong resistance and is now expected to decline further signaling a sharp decline in the crypto-currency market in the near future. We can see on the same chart that when the price of Bitcoin broke below the symmetrical triangle that is where the outlook changed and a lot of traders soon became bearish on the market.
Manipulated moves in Bitcoin (BTC) like the 43% move in two days that shook out most retail bears were seen afterwards but we also saw that the whole manipulated pump was soon erased after and Bitcoin (BTC) ended up losing even more ground. The manner in which institutions and big players have been exiting out of the market the past few months is quite concerning as it could mean that they know what is about to come. It is no surprise that they do because they practically control the price of Bitcoin (BTC) and how it trades. That is how we see similar fractals appear on the charts over and over again. They have access to all the exchanges and all the data and they know what retail traders are up to. The major pump in October was one of the worst cases of manipulation in this market but there is a high probability that a major crash in the near future would make that case of manipulation pale in comparison.
