Is Bitcoin Cash ready to break out above $300?
Despite a surge at the beginning of the year, Bitcoin Cash’s price action and trading volume have been struggling to gain momentum. It was currently being traded at $247. After weeks of consolidation and multiple pullbacks, this coin could be in for a revival.
Bitcoin Cash Daily Chart [BCH]:
The daily BCH chart formed an ascending triangle pattern with a horizontal line and an upward sloping trendline. This suggested a potential upward breakout after the formation of the triangle.
Additionally, the 100 daily moving average [Blue] dropped below the closing candle and even the 50 daily moving average [Pink] was hovering below the candlesticks. This depicted a bullish trend for the coin. Another positive sign was the converging DMAs. 50 DMA suffered a bearish cross over with that of 100 DMA on 29th March. The following month saw the two DMAs diverging. However, at the beginning of May, a trend reversal was observed as the gauge between the two DMAs declined consistently.
Bulls weigh in
The indicators pointed towards a potential breakout to the positive side. MACD, above the signal line, depicted a positive sign for the coin. RSI was also well-above the 50-median neutral zone which indicated a buying sentiment among the investors.
A breakout on the upside could catapult the fork coin’s value to its immediate resistance point at $304.2. If the trend gains necessary momentum, BCH could climb all the way to its next target level of $351.9 and $403.5.
In case of a reversal of this positive trend, the coin could retest to its previously claimed support levels of $194.2 and $146.5. However, a breakout to the negative side appeared bleak.
Currently, the BTC-BCH correlation coefficient according to the Coin Metrics website stood at 0.85. Bitcoin’s price has a strong correlation with the majority of altcoins and BCH is no different. If Bitcoin increases its value in the near-term, this could be highly profitable for its fork coin, Bitcoin Cash.
The formation of ascending triangle pattern, bullish RSI and MACD, and the placement of the daily moving averages pointed towards a potential bullish breakout in the near-term. If this trend materializes, BCH could potentially eye target points at $304.2, $351.9, and $403.5 respectively while its support levels were found to be at $194.2 and $146.5.