Analysis of Bitcoin Cash against the US dollar. The market moves, results, key levels and trends.
In this post, I applied the following tools: fundamental analysis, candlestick patterns, all-round market view, market balance level, oscillators, trading volume.
Today, I’d like to analyze Bitcoin Cash prospects and how it is traded against the US dollar.
As usual, I’ll start with the fundamental analysis and study the news background.
There is hardly any news about Bitcoin Cash, the entire market is watch the Old Bitcoin moving and is obediently following it.
I’d like to describe the general news background that has emerged recently. Without going into details, just let’s see any news portal devoted to the cryptocurrency. Already the titles suggest most news be positive or neutral.
The only strong negative that has appeared in the media recently is Bithumb cryptocurrency exchange hack.
But there is a lot of positive news:
- South Korea’s ministry of science launched a strategy for Blockchain technology development, which is aimed at developing the technology at the national level and integrating it into such industries as real estate, voting, logistics and transport, farming, customs and electronic document management;
- Stanford University launches the blockchain research centre, assisted by Ethereum Foundation;
- Spanish banking giant BBVA and energy company Repsol have partnered to develop blockchain-based financial solutions for corporate banking;
- Robinhood Markets Inc, a crypto and stock trading broker is negotiating with US regulators about launching a real bank;
- Bloomberg added Huobi cryptocurrency index into its terminal.
All these news bits are the further evidence of fundamental changes in the states in the attitude of states and big business towards the cryptocurrency technologies and the rapid integration of its elements into the world finance system.
It is also clear that there is being set up the base for changing the common sentiment and attracting more attention to the cryptocurrency.
I’m not sure whether is done deliberately or by a lucky chance, but one thing is clear; manipulators find it very hard to move the market independently, so the positive in the media can be easily supported by a series of pumps to fuel FOMO (fear of missing out) and create a huge demand in the market.
Only in such environment, the manipulators will be able to unload their cryptocurrency portfolios discreetly and gain unlimited profits.
Now, let’s study one of the most manipulated coins among the top ones, Bitcoin Cash. What shall we expect in the near future? Will BCH follow the general market sentiment? Technical analysis will help us find out.
As you see in the monthly chart above, the last candlestick broke through June’s low. Nevertheless, all the price moves fit into one giant triangle (marked with red dots in the chart above). Now, after the key level has been broken out, the bottom leg at about 700 USD can be retested within this triangle.
I’ll remind you other symbols in the chart:
Orange dots - the previous candle's close and low (broken out levels).
Orange lines – April’s low and May’s high that hasn’t been closed.
In the weekly chart, we can assess the key levels with Keltner channel. Its bottom border is exactly at the triangle’s rib at about 757 USD. The market balance level is at 1100 USD, the top border is at 1480 USD.
You see, the last two closed candles look strongly bearish. The general trend is descending, and, as I don’t see any strong supports at the current levels, I expect the ticker to continue in the same direction and test the channel’s bottom border.
Oscillators in the weekly timeframe also suggest a gloomy picture. Both MACD and RSI stochastic are moving down. Chaikin oscillator is below zero level.
There no visible reversal signals, so the price is likely to go on moving in the bearish trend.
In the daily chart, we see bullish convergence that hasn’t yet worked out. The price has approached to the local low at about 800 USD.
As Bitcoin Cash correlates to Bitcoin, I suggest we study the Old Bitcoin’s state.
As you see in the chart above, Bitcoin is accurately moving according its fractal pattern. Now, the price is being corrected within the corridor to lure sellers. It is unlikely to result in a strong drawdown. The ticker is likely to rebound to the former borders at around 6500 – 6800 very soon.
For your better understanding, just look at the chart above and compare two green boxes. I marked the similar elements with the red circle.
Finally, summing up all the above, I suggest:
- There are no reasons for panic sales in the current situation.
- The strong support zone is between 757 USD and 705 USD.
- The price will hardly go lower than 705 within the next two weeks
- Globally, the support zone is around 600 USD, its test is unlikely.
The most likely scenario for the next two weeks is trading flat between 750 USD – 870 USD.
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.