Bitcoin Cash Looking Heavy After Bull Move Fails
Bitcoin Cash (BCH) is looking heavy, courtesy of last week’s failed bullish move.
Data source OnChainFX say the world’s fifth largest cryptocurrency by market capitalization is down 4 percent in the last 24 hours, while week-on-week, bitcoin cash has yielded -2 percent returns. As of writing, BCH is trading at $2,372 – that’s down 45 percent from its all-time high of $4,330 set on Dec. 20.
BCH witnessed an upside break of the congestion last Wednesday, but the follow-through has been anything but encouraging. Contrary to expectations, the cryptocurrency failed to see a sustained move above $2,800 on Thursday.
Prices then briefly jumped to $2,884 on Saturday, but again closed (as per UTC) well below the $2,800 mark, marking another failure at key resistance.
The price action is referred to as “fakeout” – that is, when prices fail to rally following a bullish breakout and actually drop. A fakeout usually ends up turning the tide in favor of the bears.
Still, while a cause of concern for the bulls, the bitcoin cash chart shows no reason to panic.
Bitcoin cash chart
The above chart (prices as per Bitfinex) shows:
- Fakeout (failed bullish breakout) as discussed above.
- Prices have re-entered the sideways channel, neutralizing the immediate outlook.
- The 50-day moving average is still bullish (sloping upwards).
- The rising trend line is intact and could offer support at $1,880 levels.
A downside break of the sideways channel (i.e. a close (as per UTC) below $2,300) would indicate the sell-off from the record high of $4,104 has resumed. Prices could then test rising trendline support of $1,880. The trendline support is seen sloping upwards to $2,000 over the next week.
On the higher side, a close (as per UTC) above $2,950.70 (Jan. 11 high) could yield a rally to $3,319 (61.8 percent Fibonacci retracement).
Photo via Pixabay