Bitcoin Cash Technical Analysis: BCH drops after testing the waters at $300
Daily Bitcoin Cash BCH Price Analysis
- Bitcoin Cash currently sits on 20-day SMA support.
- 20-bar and 200-bar SMA in the 4-hour timeframe have charted the bullish cross.
After finding support at the 200-day SMA, BCH jumped up from $260 to $290, reaching intraday highs of nearly $300. However, it seems like reaching this psychological level has triggered a sell-off. Let’s do a technical analysis to see what’s going on with the price.
BCH dependent on 20-day SMA to stay strong
The mini sell-off has pushed the price down to $286. Thankfully, there are two strong levels right underneath the price at the 20-day SMA($280) and 50-day SMA ($272). The relative strength index (RSI) is trending along in the neutral zone, so it looks like the bulls and bears are currently cancelling each other out.
Image: BCH/USD daily chart
It will be interesting to see if BCH charts the cup and saucer pattern in the daily chart. As of now, we can merely speculate. Look at the 4-hour chart. We can see that the market momentum is still bullish (as per the MACD), and the 20-bar SMA has formed a bullish cross with the 200-bar SMA.
Image: BCH/USD 4-hour chart
However, the price faces two strong resistance levels at $290 and $295 on its path back to $300. One should note that if the price manages to break past the $300 resistance, BCH would be able to climb up to $325 before encountering another strong resistance.
Key price levels to watch for BCH
The support zone between $280-$285 (which includes the 20-day SMA) is critical for future price action. If the buyers manage to stay strong and push across the $300 psychological level, it should consolidate its position. However, if history repeats and another sell-off occurs, the 50-day SMA ($270) will be tested.