The cryptocurrency market has been moving sideways after the recent correction ended and most altcoin markets have been trying to stabilize but there were some noting a certain level of bullishness in the market like Bitcoin Cash [BCH].
The Bitcoin hard fork has been noting a short-term spike in value, however, the trends suggest that it may not be able to hold on to this level for long.
Bitcoin Cash 1-hour chart
Source: BCHUSD on TradingView
At the time of writing, BCH was being traded at $484.15 when the bulls had come to a halt. The value of the digital asset rose along an ascending channel, which could result in a breakdown.
This meant that it could prove to be a good time for short traders to place their bets.
Reasoning
The Bollinger bands were diverging due to the growing volatility in the market. As the price spiked along the price scale, the bands widened and currently were far apart suggesting a highly volatile market.
Meanwhile, the Relative Strength Index also reached close to the overbought zone as the buyers were pushing the price up. The RSI current at 67, was three points away from the overbought zone and if the buyers’ continued to enter the market, it may be overbought. However, since the price was unstable and volatility high, the surging price could take a u-turn soon.
The momentum in the market appeared to be high, which could add to the breakout resulting from the ascending channel.
Crucial levels
Entry-level: $478.31
Stop-level: $489.92
Take Profit: $454.82
Risk to Reward: 2.02
Conclusion
The current trend in the Bitcoin Cash’s market hints towards the possibility of an upcoming price drop. As the asset inches closer to the overbought zone, it may witness selling pressure, as the market gets saturated.
