Bitcoin Cash price analysis: December 9
Bitcoin Cash, the forked coin underwent, yet another fork this year. Unlike the previous forks, this was not driven by improving the blockchain efficiency. Regardless, BCH seems to be doing well in terms of its price.
Priced at $264 per coin, BCH seems to be dropping in price caused as a result of bitcoin’s drop. This article takes a look at how one should take positions with BCH if one chooses to do so.
Bitcoin Cash 4-hour chart
The attached chart shows bitcoin cash on a 4-hour time frame; there is one strong trendline that seems to have prevented BCH from heading higher since its local top of $372 on November 24. Since then, all attempts by BCH bulls were thwarted by this trendline.
Another important thing to note here is the dotted curve, which has kept the price from dropping since mid-2019.
Taking into consideration these two lines, and how the price is between these two at the time of writing, a long position seems to be the best option.
The rationale behind this is simple – long-term is unlikely to break, considering it has been holding up for more than a year and a half. Moreover, the price has formed a clear bullish divergence between OBV and RSI.
To add more bullishness to the above, RSI is in the oversold zone, which makes it more than likely for it to bounce higher, indicating a reversal in momentum soon.
Volume profile ranging from October to date showed that the POV is just below where the price is currently present; thus indicating strong support and hinting a bounce.
Level to lookout
Positions mentioned below are based on the above-mentioned profile and 3 clusters of resistance/support levels as shown in the chart.
Take-Profit: $299.18, 319.67
Risk-to-Reward: 1.9, 2.52
The take-profit at $299.18 is a conservative one, which stops at the top of the 1st cluster; however, take-profit at $319 is the top of the 2nd cluster. As for the stop-loss, it is placed at the center of the 3rd cluster.