Bitcoin cash (BCH) is pushing higher against the greenback and could test the $1,200 mark soon, according to the technical charts.
As of writing, the world's fourth-largest cryptocurrency by market capitalization is changing hands at $1,119 - up 3 percent on a 24-hour basis, according to data source CoinMarketCap. Prices had dropped to a four-week low of $938 on Friday, tracking the broader market sell-off.
However, over the weekend, BCH moved back above the $1,000 mark, signaling a temporary low is in place at $938.
Also, yesterday's 14 percent rise in BCH was backed by a 38 percent jump in trading volumes, as per CoinMarketCap. A high volume recovery only adds credence to the argument that a short-term bottom has been made.
The above chart (prices as per Bitfinex) shows:
- BCH has created a bull flag, a bullish continuation pattern, meaning an upside break would signal the continuation of the rally from the Friday's low of $914. BCH could then rise to $1,200 (psychological hurdle) and may extend gains to $1,240 - 161.8 percent Fibonacci extension.
- Bullish crossover between the 50-hour MA (moving average) and 100-hour MA favors further upside in BCH prices.
That said, it is still too early to call a long-term bearish-to-bullish trend change as the cryptocurrency is still stuck inside a falling channel (series of lower highs and lower lows on the price chart).
The previous day's bullish outside day candle adds credence to Friday's bullish hammer candle and suggests BCH will likely see an upside break of the bull flag pattern (seen in 1-hour chart) and move towards the falling channel resistance of $1,200.
- BCH looks set to test $1,200 over the next two-three days.
- A daily close (as per UTC) above $1,200 would signal the sell-off from the record highs above $4,000 has ended and the bulls have regained control.
- Meanwhile, a downside break of the bull flag would neutralize the immediate bullish outlook, while a daily close (as per UTC) below $914 (Friday's low) could yield a sell-off to $758.61 (Feb. 6 low).
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