Analysis
Bitcoin Cash Price Analysis: 31 January
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
The Bitcoin-Cash market like the Bitcoin market has been witnessing restricted movement. The digital asset was priced at $405 at the time of writing but was heading lower on the price scale. Meanwhile, the market capitalization has slipped to $7.49 billion putting it in the ninth position on the CoinMarketCap list.
Bitcoin Cash 6-hour chart
Source: BCHUSD on TradingView
The Bitcoin Cash chart highlighted the journey of the price from $500 to its current price of around $405. The descending channel outlined this downwards trending price with its current support at $393.22, which may be challenged as soon as the coin slips within the bearish pattern.
Ever since the beginning of the descending channel, the 50 moving average had moved above the candles. At the time of writing, the growing gap suggests that the price may continue its current trend.
Reasoning
Bitcoin Cash’s price remained above the support level but a drop is possible. The market has been painting a bearish picture due to increased volatility indicated by the divergence of the Bollinger Bands. A price swing further along the channel could be a possibility. The signal line also remained above the candles, suggesting that the price was moving lower.
The Relative Strength Index affirmed a rise in selling pressure as it was dropping from the equilibrium zone and closer to the oversold zone. If the price didn’t hold at $393, it may continue its fall till $336.
Crucial levels
Entry: $392.72
Stop-Loss: $415
Take-Profit: $336.35
Risk-to-Reward: 2.49
Conclusion
The Bitcoin Cash market has been witnessing a gradual drop and it may continue its journey lower unless unprecedented volatility hits the market. The price has dropped under the support before and the descending channel formed offered it support at $366. If BCH submits to the selling pressure it may drop all the way down to $336.
