Bitcoin Cash token has seen sideways movement for over 2 months, within the price range $200 – $220. At press time, the token was priced at $239 and had a market cap of $4.14 billion. Due to sideways movement and reduced volatility, the coin has seen a meager -0.23% decline in the last 24 hours. However, over the last week, the coin has seen a -5.46% decline in the price, suggesting a downtrend.
Bitcoin Cash’s Daily Chart
BCHUSD TradingView
From the above chart, it can be seen that the sideways movement has resulted in the formation of a pennant or a symmetrical triangle pattern. The breakout for this pattern is a 50-50, hence, it could be an upward breakout or the opposite.
Depending on the breakout, the price will face a resistance zone or support levels. Based on the current RSI position, the likelihood of price bouncing is higher, as the RSI has done the same since mid-April. In this case, the price will bounce to the top of the pennant, and then breakout. From here, the price will move freely up to the resistance zone ranging from $306 to $354.
Hence, if the price does enter this zone sideways movement can be expected. In an extremely bullish case, if the price has the momentum to breach this zone, it will head towards resistance level $409, where it will see another phase of sideways movement. In case, the price breaks bearish, then it will encounter the support levels $200 and $168.
Moreover, for the price to head higher, the initial level it needs to cross would be the 50 DMA [yellow], which has already rejected to price twice over the last week. Furthermore, the 200 DMA [purple] will also hinder the upside movement of the price during the breakout.
Conclusion
The upside movement for BCH is restricted not only by the 50, 200 DMAs acting as resistance but also by the horizontal resistance levels. For the price to reach the top line of the pattern and hit the lower bound of the resistance, there needs to be a 10-25% surge from the current level. In an unlikely scenario, where price fails to breach 50 DMA or 200 DMA, then the price will drop down by 15-30%, resulting in $168 per token.
