Bitcoin Cash Technical Analysis: BCH trends horizontally as it continues to consolidate in a symmetrical triangle

Last Updated December 8th 2020

Daily Bitcoin Cash (BCH) Price Analysis

  • The MACD has turned bearish in both the daily and 4-hour BCH/USD chart.
  • The 20-bar SMA is on the verge of crossing over the 50-bar SMA in the monthly chart.

After a roller-coaster end to November, Bitcoin Cash has had a rather lackluster start to December. Between November 20 and November 24, the price rose from $247 to $350, reaching its highest level since March 2020. However, since then, the Bitcoin fork has been on a severe downtrend, having slipped down to $275.45 as of press time.


BCH goes through a low volatility period

Since failing at the $317.50 resistance wall, BCH has been trending horizontally for the last seven days. This period of low volatility is characterized by the squeezing of the 20-day Bollinger band. A squeeze in the band indicates a period of low volatility as the underlying asset goes through a period of price consolidation before a breakout.

bch/usd daily chart analysis

BCH/USD daily chart

One can also see the price consolidation in the 4-hour BCH chart, wherein the price has been settling in a symmetrical triangle pattern.

bch/usd 4-hour chart

BCH/USD 4-hour chart

The moving average convergence/divergence (MACD) in both the 4-hour and daily chart shows that the market momentum is bearish. So a breakout from the triangle is probably going to be bearish. 

The price faces immediate support at $281 at the upward slope of the triangle. If the price breaks below that, the next level of note is at the $275.45 support that we identified in the daily chart. If the price continues to go down, the next support lies at $233, which is the previous month’s low.


Can the bulls take over in the long term?

Looking at the monthly time-frame, it does look like the long-term sentiment for Bitcoin Cash may be bullish. Specifically, the 20-bar SMA is looking to cross above the 50-bar SMA to form the bullish cross pattern. The last time the curves properly crossed each other was back in July 2019. The bullish cross triggered the price to rise from $280.50 to $338.75 in four sessions.

bch/usd montly chart analysis

BCH/USD monthly chart

If the curves intersect and the price reacts accordingly, it could push BCH to break above the $309.50 and $317.50 resistance barriers.


Key price levels to watch

The main thing to note is how Bitcoin Cash reacts after moving out of the triangle in the 4-hour chart. The lack of market momentum suggests that the trend will continue to be horizontal. If BCH breaks below the $281 support, the price may drop to the $275.45 level and then to the previous month’s low at $233. 

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