Bitcoin Cash (BCH) price analysis: A bottom formation may be in process
Bitcoin Cash may consolidate in the near term
The crypto markets are nervous ahead of the United States Federal Reserve’s expected aggressive rate rise to fight inflation. Bitcoin Cash, which had started a relief rally recently, has given back some of its gains and the bulls are attempting to defend the $115 level as of 26 July 2022.
Bitcoin Cash was the first major hard fork of the Bitcoin network. It hit an all-time high of $4,355.62 on 20 December 2017, according to coinmarketcap. From its high, the coin has plunged more than 97%, indicating that not all long-term investments are beneficial.
The most vocal supporter of Bitcoin Cash, the entrepreneur and former CEO of Bitcoin.com Roger Ver, was recently mired in controversy when Mark Lamb, the CEO of the crypto investment platform CoinFLEX, said that Ver owed the firm $47m in USDC.
However, Ver rubbished the claims and said without naming CoinFLEX that he did not owe any money to the counter-party as claimed, rather the counter-party owed him a “substantial sum of money.”
Could Bitcoin Cash find buyers at lower levels? Will Bitcoin Cash go up? Read our BCH price analysis to find out.
Bitcoin Cash price technical analysis: Weekly chart
BCH’s price has been in a strong downtrend for the past several months. The BCH/USD pair slid below the psychological support at $100 a few weeks back but lower levels attracted buying from the aggressive bulls.
The relief rally reached $134.60 where the bears mounted a strong defence. The downsloping moving averages and the relative strength index (RSI) in the oversold territory indicate that bears are in control.
If the price turns down from the current level and plummets below $94.90, the pair could resume its downtrend.
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Contrary to this assumption, if the price rises from the current level, the bulls will attempt to extend the recovery to the 20-week exponential moving average (EMA) where the bears may again mount a strong resistance.
Bitcoin Cash price technical analysis: Daily chart
BCH’s price broke and closed above the 50-day simple moving average (SMA) on 24 July but the bulls could not build upon this momentum. The bears pulled the price back below the 50-day SMA on 25 July and are currently attempting to sustain the price below the 20-day EMA.
If they manage to do that, it will suggest that the break above the 50-day SMA may have been a bull trap. The first support on the downside is $109 and if this level cracks, the pair could fall to $94.90.
However, the moving averages are close to completing a bullish crossover and the RSI is just below the midpoint indicating that the selling pressure may be reducing.
If the price turns up from the current level and rises above $134.60, it will suggest that the sentiment has shifted from selling on rallies to buying on dips. The pair could then attempt a rally to $150 and later to $190.
Bitcoin Cash’s price analysis shows that bulls are attempting to form a bottom. The up-move could pick up momentum if bulls drive the price above $134.60. If that happens, the pair could rise to $150. On the downside, the immediate support is at $109. If that cracks, the pair could drop toward $94.90.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.