- Bitcoin Cash is back to trading June lows as the crypto massacre continues across the board.
- A daily close under $400 could trigger another downswing toward $300.
- Recovery becomes a daunting task following a robust resistance highlighted by the IOMAP on-chain model.
Bitcoin Cash extends the bleeding alongside other crypto assets. The market is a sea of red waters, with losses mainly in double-digits. Data by CoinGecko affirms that BCH lost over 10% in value over 24 hours to trade at $390 at the time of writing.
The 4-hour chart shows that declines have been unstoppable since July highs of $540 in the first week of the month. Losing support at $430 caused instability in the market, with massive sell orders triggered.
Another tentative support at $400 did little to stop the losses, allowing the bearish leg to stretch to $385, the same level Bitcoin Cash stopped following the crash in June.
Bitcoin Cash Price Pulldown Steadies
A death cross pattern on the four-hour chart accentuated the bearish grip on the price. Realize that this pattern appeared as the 50 Simple Moving Average (SMA) crossed below the 100 SMA, thus increasing the odds for the prevailing downtrend.
In addition to the golden cross, the moving average convergence divergence (MACD) adds credence to the pessimistic outlook.
The technical indicator follows the path of a trend and calculates the momentum. It recently turned bearish within the same time frame for the first time since July 12. As the 12-day exponential moving average crossed beneath the 26-day exponential moving average, the odds for a bearish impulse increased significantly.
BCH/USD four-hour chart
The bearish impulse may continue to hold as long as Bitcoin Cash stays below $400. Note that selling pressure will keep rising if support at $385 shatters. On the downside, Bitcoin Cash will seek refuge at $350 and $300, respectively.
Consequently, recovery will not be a simple task based on the massive resistance between $422 and $435. Here, around 114,000 addresses previously bought roughly 611,000 BCH. It is implausible for bulls to crack through this zone on the first attempt. Besides, more resistance has been highlighted between $435 and $448, which may delay the uptrend further.
Bitcoin Cash IOMAP Model
On the downside, the lack of a formidable support area appears to be brewing another havoc for Bitcoin Cash. Hence, the least resistance path will remain downward much longer. Realize that the IOMAP highlights the region between $330 and $342 as the most substantial support area, but is it still significantly weak compared to the above resistance zones.