After a sudden rally in the cryptocurrency market, a strong correction was also witnessed. The prices of most altcoins were largely impacted by this trend including Bitcoin Cash [BCH]. At the time of press, BCH was trading at $523.73 with a market capitalization of $10.02 billion.
Bitcoin Cash four-hour chart
Source: BCHUSD on TradingView
The above chart of Bitcoin Cash [BCH] indicated that the price retraced as the digital asset hit resistance at $616.62. It slipped through one level of support at $569.68 and even plunged under $519, before finding a hold above this level. At the time of writing, the selling pressure remained in the market, and the price was testing support at $519.
The price may continue its downward trend as the Bitcoin market has also been seeing a similar downtrend.
Reasoning
The Bollinger Bands indicated high volatility which was followed by a falling price. This falling price indicated that the bears were leading the market and the 50 moving average took the spot above the candles. It was now acting as a resistance close to $543. Meanwhile, the signal line also moved above the price bars, highlighting the downward sloping price.
The MACD line had plunged under the signal line and was noting a sharp drop. This was a sign of a bearish market and the length of the red candles increased, along with the selling pressure.
Meanwhile, the Relative Strength Index was noting the value of the indicator move awfully close to the oversold zone. This suggested that the sellers were overpowering the buyers in the market and may continue to sell BCH at the current level.
Conclusion
The above chart of BCH noted that the digital asset was witnessing a downtrend as the price slipped close to the support at $519. The price may experience a push and pull at this level, as traders continued to try and stabilize the market.
