BCH breaks above the short-term resistance at $233 — is $250 next?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The volume indicators showed there was some demand to drive prices higher.
- The $250-$260 was a significant resistance zone in the past month and might not be breached quickly.
Bitcoin Cash [BCH] posted enormous gains in June. It surged from $104 to $329 but has retraced half those gains since then. The higher timeframe charts showed a clear bullish bias. Yet, in the lower timeframes, a good portion of the bullish sentiment has evaporated.
Read Bitcoin Cash’s [BCH] Price Prediction 2023-24
It is common for an asset to see a period of retracement and accumulation after a wild rally. Bitcoin Cash could be seeing one at the time of writing. It formed a short-term range- and traders can profit from this range.
BCH was at the mid-range mark, giving traders the opportunity to plan for both directionsIn August, Bitcoin Cash traded between $250 and $217. These levels were confirmed as the range extremities on 7 and 8 August, when the price touched the low and then the high within 48 hours.
At the time of writing the price was at the mid-range mark. However, the volume indicators showed the buyers have an advantage. The Chaikin Money Flow (CMF) was at +0.17 to signal significant capital inflow to the BCH market. The On-Balance Volume (OBV) also appeared to form a higher low and climb over the past two days.
The Relative Strength Index (RSI) jumped above neutral 50 to show bullish momentum. The market structure on the four-hour chart was also bullish after the recent lower high from 12 August at $231 was beaten on 13 August.
A steady rise in spot CVD signaled a rally toward $250 was inboundSince 12 August, the spot CVD has slowly trended higher. This indicated increased buying volume. In recent hours, BCH threatened to break the mid-range mark. This bounce was accompanied by rising Open Interest. Hence, speculator sentiment was bullish. Yet, the funding rate was bearish, which suggested the opposite.
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It was possible that further gains would see bulls flock to the market in the short-term and shift the funding rate positive, but as things stood a reversal from the mid-range was what traders seemed to expect.
Instead of trading the chop in the middle of the range, a more consistent trade would be to look to short the range highs at the psychological $250 resistance. Longing at the range lows was also viable.