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Analysis

Bitcoin Cash could be on the cusp of noting a major upside breakout

Chayanika Deka

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Source: Pixabay

Despite steady upward price action, Bitcoin Cash is yet to recover nearly 50% of its yearly gains. The fork coin was being traded at $247, at the of writing, with BCH having been severely rejected near the $255-mark, even as attempts to breach the key level continued unhindered.

Bitcoin Cash [BCH] 1-Day Chart

Source: BCH/USD on TradingView

Bitcoin Cash’s price was observed to be oscillating between an ascending triangle pattern, one that has been taking shape since April. A breakout from this pattern is likely to be a bullish one. This was supported also by the slowly rising 50-daily moving average [Pink], which hinted at slowly heading upwards.

The price candles were resisted by the 100 DMA [Purple] which underwent a bearish crossover with the 50 DMA in the last week of March. It looks like the coin was in the helm of recovery, as the moving averages were converging, a trend propelled by the latest rally on the charts.

Source: BCH/USD on TradingView

Further solidifying the bullish pressure was the RSI indicator, which was headed above the 50 median line and noted buying pressure among the investors in the market.

Case 1

All the indicators pointed towards a bullish breakout and in this case, the coin could potentially climb all the way down to $272.19, where the 100 DMA was found to have been resisting the BCH price candles. Additionally, as depicted by the VPVR indicator, high trading activity was noted at $328 and $383 levels as zones which historically have seen significant trading activity

Case 2

In a highly unlikely case of a trend reversal, the coin’s support targets stood firm at $174.5 and $147.9, respectively.

Correlation

Source: Coin Metrics

BCH-BTC correlation coefficient stood at a high of 0.89, despite a minor drop. This was indicative of the fact that the fork coin, just like all the other altcoins, is still very much influenced by the wild swings of the king coin.

Conclusion

An upside break was supported by the ascending triangle formation which could catapult the coin all the way to $272.19. If the trend persists and Bitcoin Cash continues to swing bullishness, its price could climb as high as $328 and $383. The chances of a retest, however, to the $174.5, and $147.9 support points, at the current stage, appeared very bleak.

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Chayanika is a full-time cryptocurrency journalist at AMBCrypto. A graduate in Political Science and Journalism, her writing is centered around regulation and policy-making regarding the cryptocurrency sector.

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