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).
Falling tower of blocks image via Shutterstock
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