Bitcoin Cash might consolidate above $200 after 32% dip
After spending the entirety of 2020 above $200, Bitcoin Cash’s valuation came crashing down today after the collective market recorded a major bearish pullback. With losses coming on all fronts for a majority of the tokens, BCH’s valuation fell to $178, at press time, with a market cap of $3.27 billion.
Over the week, Bitcoin Cash suffered the highest depreciation, with a pullback of close to 50 percent.
Bitcoin Cash 1-day chart
On analyzing Bitcoin Cash’s 1-day chart, it can be pictured that the crypto-asset went past major support levels at $217.64 and $200 during the recent slump. With prices rallying towards the start of the year, prices were relatively high on 6 March as well, with BCH being valued at $352.
However, an inverted head and shoulder pattern was pictured on the charts, a pattern that may have played a critical role during the recent downturn. The pattern was breached on 7 March itself, but the major collapse occurred on 12 March. The initial breach of the pattern saw the token undergo mediation below the $300 range on the 7th, and the recent slump facilitated its drop under $200.
At press time, Bitcoin Cash had managed to remain above support levels at $170 and further depreciation should be avoided beyond this point.
The VPVR indicator suggested that the valuation might manage to consolidate above $200 after corrections take place, as the trading activity has been substantial between $200 and $217 over the past 9 months. However, the fact that the 200-Moving Average underwent a trend reversal during the course of the price fall is a major bearish sign.
Even though the RSI indicator remained bearish, over the past 9 months, BCH has dwelled in the oversold zone only twice, which suggested that the price could bounce right back after the recent dip under $200.
The MACD was significantly bearish as well, as the signal line continued to hover above the MACD line.
It is difficult to foresee BCH’s immediate response, but corrections should allow a quick return above $200. Consolidation under the mark for more than 48 hours may suggest a different scenario, hence, the next few days would be critical from Bitcoin Cash’s perspective.