Bitcoin Cash: What to expect over the next 48 hours
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Bitcoin Cash looked set to challenge some important price levels after rebounding from the $470-support. A crossover between the 4-hour 20 and 50 SMAs can be expected to play in favor of the bulls by offering some additional buy signals.
A close above the $550-mark would flush out sellers and help BCH develop a foothold for a rally. At the time of writing, BCH was trading at $542, up by 7% over the last 24 hours.
Bitcoin Cash 4-hour Chart
The Fibonacci Retracement tool was used to trace BCH’s decline from the $800-mark to a swing low of $471 to identify potential areas of reversal. A close above the 23.6% Fibonacci level would help BCH negotiate past a chunk of selling pressure and set $600 in its crosshairs. From there, an additional 6% push can develop provided the 200-SMA (green) does not impede BCH’s advance. Overall, this represented a hike of 17% from BCH’s press-time level.
If an upwards breakout at $550 is immediate denied, expect a retest of the $520-support. The confluence of the 20 and 50 SMAs could also cushion any countermeasures taken by sellers. A triple bottom would inject life back into the market in case BCH revisits the $470-mark.
Now, the RSI’s overbought nature did present some near-term hurdles. However, an advance above this upper zone can be expected as long as the index keeps above 60. Similarly, the MACD needs to avoid a bearish crossover to preserve upwards pressure in the market.
The Directional Movement Index abated any fears of an immediate reversal as long as the +DI held above the -DI.
BCH can be expected to ease slightly below the 23.6% Fibonacci level before attempting a northbound breakout. This would allow the RSI to stabilize before the next upcycle.
Bulls can look to capitalize on this advantage by pressing above $600. From the same, the 50% Fibonacci level can be challenged.