Bitcoin Cash Technical Analysis: All eyes on BCH as price approaches key $250 psychological level
Daily Bitcoin Cash BCH Price Analysis
- The MACD in the 4-hour chart has reversed from bullish to bearish.
- The key support levels lie at $255 and $245.
Bitcoin Cash has been on a steady downtrend since November 25 after failing to capture the $350 psychological zone. Reaching a nice whole number prompted many holders to sell off their assets, which has, in turn, forced the Bitcoin fork to reach $260 at the time of writing. As we approach another psychological level at $250, the question is whether it will trigger a sell-off or another buy-in.
$250-zone to be a rebounding point
Looking at the daily chart of BCH/USD, we can see that the $250-zone had previously acted as a jumping point for the buyers. On November 28, the price jumped from $260 to $320 in just four days after the bulls found support.
Image: BCH/USD daily chart
However, can this pattern be repeated? It is worth noting that previously BCH had found support on the 50-day SMA, which provided the buyers with enough firepower to conduct their upwards assault. However, this time, the 50-day SMA is acting as market resistance, so it will be interesting to see how BCH reacts.
Image: BCH/USD 4-hour chart
Looking at the 4-hour chart confirms this bearish hypothesis to a large extent. As can be seen, the price is presently trending underneath a strong downward trending line. One can now see the price sitting on top of the $255 support. However, the MACD (moving average convergence divergence (MACD) has now reversed from bearish to bullish. This states that the downward trending line will stay strong and prompt the price break below the $255 support. If that happens, then the next viable support in this time frame is at $245.
Image: BCH/USD weekly chart
The weekly chart above shows that, after repeated attempts, BCH has failed at the $289 resistance barrier and is currently freefalling towards $245 support. A break below that takes BCH to the upward trending line at $240.
Key price levels to watch
There are two strong support walls on the downside that can inhibit the downtrend significantly – at $255 and $245. The price will soon test the $255 support, and it will be interesting to see if BCH holds firm. However, a break below that takes the price to $245, which the buyers will need to defend with everything they have. If they fail to do so, the price will drop down to the $220 support wall in the monthly chart.