fxs_header_sponsor_anchor

Bitcoin Cash Price Prediction: BCH technicals turn bearish, risking freefall to $400– Confluence Detector

  • Bitcoin Cash fails to break above the resistance at $540 as overhead pressure increases.
  • As shown by the confluence indicator, little to no support suggests that correction to $400 is likely.

Bitcoin Cash appears to be struggling to hold at $500 in the wake of rejection from highs around $540. A glance at the 4-hour chart highlights increasing overhead pressure. If BCH closes the day under $500, significant downward pressure will come into the picture.

Bitcoin Cash uptrend sabotaged

BCH has in the past few days recovered from Monday’s drop to $400. The momentum was built within a rising wedge pattern. The correction from the weekly high at $540 is testing the lower trendline of the pattern. A break below the lower trendline could call for more sell orders as Bitcoin Cash dives toward $400.

Notably, breakdowns usually occur before the trendlines converge. The typical correction is generally confirmed by decreasing volume (highlighting a divergence between volume and price). Downward price actions are usually fast and drastic.

BCH/USD 4-hour chart

The confluence Detector validates the bearish outlook by presenting multiple resistance zones ahead of Bitcoin Cash. For instance, an initial hurdle is highlighted at $511 by the SMA five one-day.

If Bitcoin Cash breaks this zone, the uptrend could be stopped by the most robust barrier at $517. This zone is home to the one-day 38.2% Fibonacci level and the 1-hour Bollinger band middle boundary.

On the downside, little support has been provided for Bitcoin Cash, where the only formidable anchor lies at $507. This confluence zone hosts the 10 SMA 4-hour, the five SMA 1-hour, and the 15-minutes previous low.

BCH/USD confluence levels

On the other hand, the 50 Simple Moving Average is in line to offer support in case the price explores the areas under $500. If the price rebounds from here, Bitcoin Cash will gain momentum, favoring another run-up to $540 and perhaps $600.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.