Bitcoin Cash Price Analysis: Traders Still Seeking Floor
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- Bitcoin Cash continues to drift lower as crypto traders search for a price floor
- The BCHUSD pair has been creating bearish lower highs since late December
- The Relative Strength Index show a below 40 reading on almost all important time frames
BCH / USD Short-term price analysis
In the short-term, Bitcoin Cash is bearish and rather than breaking away from the pack, it has now become conformist and is being dragged lower by the broader cryptocurrency market sentiment.
Major support for the BCHUSD pair in the immediate term is located at the $121.00 level, which is close to the weakest levels of 2019 so far for the fourth largest cryptocurrency.
The bullish rally towards the $215.00 level during mid-December created very few retraces lower in the initial stages, the $113.00 level is a former swing-low from the previously mentioned rally and is now the key area to watch below $121.00.
It is worth noting that below the $113.00 level, the $85.00 level is the only real noteworthy support level, aside from December low.
Pattern Watch
The major theme that stands out when looking for trading patterns for the BCHUSD pair across the lower time frames is the amount of failed inverted head and shoulders patterns.
The four-hour time frame illustrates very well just how often buyers have failed to follow through when a bullish inverted pattern starts to take shape.
(Source: TradingView)
Key Moving Averages
Much like other cryptocurrencies, price trades below the 50 and 100-period moving averages on the four-hour time frames, which is again indicating short-term sellers are in control of price action.
RSI & Volume
The RSI indicator on the four-hour time frame remains weak but has yet to reach oversold trading conditions.
The volume indicator has been in constant decline since the huge spike that occurred during the BCHUSD pairs meteoric rise towards the $215.00 level late last year.
BTCUSD Medium-term price analysis
In the medium-term, the BCHUSD pair is bearish. The downtrend in Bitcoin Cash started after the cryptocurrencies hard fork happened during November last year. Price has consistently remained below its 50-day moving average, despite December’s brief corrective retracement.
Since then Bitcoin Cash has shed close to half of its market capitalization and been under constant downside pressure, with traders generally selling rallies.
(Source: TradingView)
Pattern Watch
If the $74.00 support level holds firms, a bullish double-bottom pattern will start to form, medium-term traders may also be anticipating this move.
Typically we see traders testing a close to an important technical trading bottom as possible for technical confirmation.
Key Moving Averages
Until price starts to trade above the 50-day moving average their a very few reasons to be bullish the BCHUSD pair over the medium-term.
Momentum
One of the best ways to use the momentum indicator is by finding divergence between price and the indicator itself.
The daily time frame shows the momentum indicator over a 10-day period. Momentum has remained fairly stable, while price continues to make fresh lower lows.
The overall divergence is not on a large scale, but is certainly worth watching.
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