Is a Bitcoin Cash rally within reach right now
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
The altcoin market has had its share of ups and downs over the past week. While most alts have steadily declined in value, the likes of AVAX, ALGO, ATOM, and XTZ opposed broader market trends and registered strong gains. Sadly, Bitcoin Cash belonged to the first category after a woeful week of trade which accounted for losses of over 16%.
The formation of a down-channel charted BCH’s decline. However, there was some optimism in the market. A newer high can be projected and there were some chances of an upwards breakout. At the time of writing, BCH was trading at $622.6, up by 2.5% compared to yesterday’s close.
Bitcoin Cash 4-hour Chart
Bitcoin Cash avoided yet another breakout attempt after the price bounced back from the lower trendline. Going forward, a push above $630 would pave way for a newer high at the 38.2% Fibonacci level. From there, an upwards breakout could even trigger a hike all the way towards the $700-mark.
While the pattern does ideally witness a break to the upside, press time market dynamics did not favor this outcome just yet. This was mainly because BCH’s indicators highlighted weak conditions for an extended rally.
For instance, the 4-hour RSI was well within the bearish territory at the time of writing. The index usually trades below 55 when a downtrend is active in the market. To overcome these conditions, the RSI needs to shift above 60. Moreover, the MACD was trading below its equilibrium and showed no signs of a revival.
However, the Awesome Oscillator pictured an interesting observation. A bullish twin peak setup gave rise to a possible hike in upwards pressure and while this could be seen over the short term, a lot more work is required for the next BCH rally.
The 24-hour trading volumes noted a near 10% increase as BCH pushed north within its pattern. Even though the price was tipped to scale above the mid-line of its down-channel, chances of an upwards breakout were slim. A majority of BCH’s indicators hovered in bearish positions and only the Awesome Oscillator fueled some optimism.
If profit-taking is seen, the price could revisit the 50% Fibonacci level at $593.6.