Bitcoin Cash Price Prediction: BCH Drops After Charting Evening Star Pattern
Daily Bitcoin Cash BCH Technical Analysis
- The daily chart is on the verge of flashing the sell signal in the TD sequential detector.
- Price could drop below $400 before it encounters healthy support.
Bitcoin Cash bears have taken complete control of the market as they dominated proceedings for the second straight day. Since markets opened this Thursday, BCH has crashed from $455 to $420.
BCH Drops After Charting Evening Star
The three latest candlesticks in the daily price chart have formed the bearish evening star pattern. This pattern indicates that the price may drop down even more. The MACD shows that the bullish market momentum is decreasing.
Image: BCH/USD daily chart
According to IntoTheBlock’s IOMAP, Bitcoin Cash could drop below $400 before it finds healthy support at the $390 zone. The upside is guarded by strong resistance at the $465 line. Previously at this level, 47,500 addresses had purchased a million BCH tokens.
The 4-hour chart gives further credence to our bearish outlook. After dropping from $460 to $415, the parabolic SAR reversed from bullish to bearish. At the same time, the 20-bar SMA in this timeframe flipped from support to resistance.
Image: BCH/USD 4-hour chart
The 20-bar has previously been a healthy support level, so we can expect it to be a strong resistance barrier, as well. The number of addresses entering the protocol gives further credence to our bearish outlook.
After reaching 45,760 on January 3, the addresses have dipped to 40,500 this Thursday. This is a negative sign since it shows that the network is getting progressively weaker.
Key Price Levels To Watch For BCH
If the $390 support barrier doesn't hold up, BCH could fall to the 20-day SMA ($360) and after that to the 50-day SMA ($310). As such, the buyers have to make sure that the $390 support zone is as strong as it could be.