Analysis for Bitcoin Cash to US dollar. We will analyze the market trend, estimate the results, mark the key levels and price moves.
In this post, I applied: fundamental analysis, all-round market view, market balance level, oscillators, trading volume indicator, key levels, Fibonacci levels.
We have all witnessed the recent crazy growth of Bitcoin Cash, to the audience’s surprise and BCH holders’ joy.
Such a surge will hardly leave anyone indifferent. Now, many wonder, what the reasons are for such a strong rise and whether there are real grounds. Will the coin go on rising in price and should we buy it at the current levels?
I followed the recent surge real-time and I had no doubts that it was artificial. Rodger Ver is a very smart guy, and he proves to be so every day.
He skillfully promotes his creation and by all means tries to make up hype around it, simultaneously criticizing his rivals, first of all, Bitcoin itself and Bitcoin Core.
Rodger Ver realizes that to pump up BitCash by just inflating the trading volume, buying out all the bids is inefficient and very costly. So, to push BitCash up easier, he creates the news background around it, and spreads it through all resources, from his personal twitter and @bitcoin account that also belongs to him to affiliate web site bitcoin.com.
A whole army of subscribers, and there are almost 900,000 of them on the same twitter account, catch every word and spread it across the Internet. A whole army of “hamsters” follow it, and pump the token for free, sending BCH to the space. Skillful managing information background yields good results.
So it happened on June 2, when Roger Ver announced on bitcoin.com YouTube channel that tens of thousands of Japanese shops would accept Bitcoin Cash, but forgot to note that the old good Bitcoin would be accepted equally with Bitcoin Cash.
As a result of this news, BCH surged up like a rocket, featuring the peak at about 1200 USD. After that, it safely went down to the level it had started from, at about 1040 USD.
If you look at the chart above, you’ll see that BCHUSD regularly features sharp rises in the correlation to BTCUSD, deviating from the Old Chap within 10%. Such jumps can be and should be worked out. According to the frequency of jumps, these anomalies occur on average once in seven days. So, I’m going to schedule this event and check whether it works on June 12 ????
A week within the middle-term trading is rather a short period. That is why we can quite easily assume the probability of this suggestion by means of technical analysis.
Let’s start with the BCHUSD monthly chart.
I marked May’s extremes with an orange solid line, and also April’s low that hasn’t been closed and is also the strong support level.
I marked weaker, but still quite important levels with dotted lines; they are last month’s open and close levels.
As it is clear from the monthly chart above, the body of April candle is inside May one, which suggests the market sideways trend. In addition, the body itself is in the top half of April candle, which is another bullish signal.
If we study the BCH sideways trend in more detail, the most clear are the borders of this channel. Along the highs of January and May, we can draw the triangle's upper leg; and along the lows of October and April – the bottom snap line. Finally, we have an equilateral triangle, whose acute angle finishes between August and September.
If you look at the weekly chart, you’ll see that the ticker is below the balance level of Keltner channel (I marked its current borders with purple).
Last week closed with a white candle with a long tail downward, breaking through the previous low. It’s a bullish sign that suggests about buyers at the levels from 868 up to 966.
According to the general situation in the weekly timeframe, going upwards seems rather slow and hard. To reach at least the triangle's upper border, the ticker needs to pass through the balance moving average of Keltner channel, the check point of vertical volume indicator and May’s close level. Near here, there is also Fibonacci level of 0.618 from the last bearish trend.
Such a lot of resistance levels for bulls and the manipulators’ support at lows will press the price and get it to move sideways, until one of the parties runs out of resources or patience.
Oscillator in this situation proves my words, indicating the sideways trend.
Both MACD and RSI stochastic are hanging in the window center, waiting for the market further developments.
The daily chart proves the current borders of the trading range at about 868 – 1200 USD.
You see in the chart above, RSI stochastic is already painting a rounding in the oversold zone and is going to move down. MACD in this respect is lagging far behind and is still indicating growth. However, there is convergence, I marked it with a blue line in the chart above; this signal hasn’t yet worked out and is waiting to be confirmed in other timeframes.
Bitcoin Cash behaves like a naughty son that is trying to show off its independence from the parents but still has to follow them. Maybe, when BCH grows up a little, it will become more independent. Meanwhile, we should be prepared that it will swing greatly in price, jumping up and down.
The most likely scenario for me is moving inside the channel between 1000 and 1200 with gradual narrowing of the range and the ticker leaving the triangle at the end of this week or at the beginning of next. It should try to reach the triangle’s upper border, followed by the correction down, towards the growth base.
In addition, the level of 996 is quite likely to be touched.
The level of 868 is hardly likely to be tested in the next few weeks.
I wish you good luck and good profits!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.