BCH (Bitcoin Cash) saw its chance to recover as the crypto market’s capitalization still hasn’t made that much recovery. After stalling for a few candles at or near its pre-FTX collapse price level, the Bitcoin hard fork continued its descent.
CoinGecko reports that Bitcoin Cash has greens on the weekly and biweekly timelines, but reds on the daily and monthly charts.
Here’s a quick glance at BCH movement:
When dealing with BCH, caution is advised
There are conflicting signs coming from bitcoin cash
Bulls must keep an eye on the 50 Fib retracement line
This may indicate that trading BCH in the long term is not a good idea. At least, not yet.
The Bitcoin Correlation
As was said, the correlation between Bitcoin and Bitcoin Cash was exceptionally high during the aforementioned market correction. Its pullback showed considerable significance as it fluctuated in the 0.90s.
It’s possible that BCH will experience more losses in the near and medium term as it breaches the rising triangle pattern.
When this was written, the coin’s value was trading at around the 50 percent Fibonacci retracement level. There are additional breaks in the lower part of the regression channel. It suggests the downward trend could be more pronounced than initially thought.
Volatility is reflected in the Bollinger band’s expansion, but it’s also providing dynamic resistance. As the band widens, the orange middle band, currently at $112.7, acts as a downward pressure on the price.
First, bulls must keep an eye on the 50 Fib retracement line, as this will be the bears’ immediate objective.
Currently, the bears lack sufficient momentum to advance. This might change, though, if the RSI moves into oversold area, so boosting BCH’s downward momentum. This is within the 4-hour window.
Price Movement Suggests Reversal
On a daily time scale, the MFI clearly contradicts the price movement and indicates a reversal. Currently, a reversal could target the 38.20 Fib level to recoup lost ground.
On shorter timelines, the reversal is currently taking shape. If BCH can close the daily candle with a green candle, it will have a greater possibility of experiencing a well-supported relief rally.
Even when a reversal is in the process of forming, one cannot reject the other technical indicators that paint a different image.
As the RSI continues to decline, the price would follow suit. The regression channel is positive on a daily basis, suggesting the probability of a rally.
If the bullishness persists, BCH may hit the 23.60 Fibonacci barrier in an attempt to recoup pre-FTX levels. However, if bears outnumber bulls, BCH may breach the 61.80 Fib level.
BCH total market cap at $2 billion on the daily chart | Featured image from Coin Edition, Chart: TradingView.com