Updating the scenario for the BCHUSD and identifying the key levels
Today I would like to make a forecast for Bitcoin Cash, and specifically, a scrupulous analysis of the BCHUSD.
Recently there has been a lot of negativity around this coin. But for me, it remains unclear, what could cause such a dislike for this altcoin?
After all, the information that this coin has problems with centralization and is in the hands of one owner, and that the number of transactions in the BCH blockchain are on par with the long forgotten Dogecoin (see the chart below), has been known for a long time.
If we compare the dynamics of BCHUSD and BTCUSD, these two tickers continue to be in a very strong correlation (see the chart below)
However, it is clear that, unlike the grandfather of the cryptocurrencies, Bitcoin Cash currently has virtually no support. And while bitcoin's situation with the updating of the bottom is still ambiguous, the situation with Bitcoin Cash is much more complicated.
The reason for all this is the general flight from altcoins during the bearish trend, which Bitcoin Cash still is, despite what Roger Ver and his team may be saying.
On the other hand, BiCash is one of the most manipulative coins, despite the prestigious top spot by "capitalization".
However, in the current conditions of a global outflow of funds from the cryptocurrencies, any pump can play a cruel joke with the manipulator itself. Sharp jumps up in the current conditions, instead of giving a signal for a turn, will only give the hamster an additional opportunity to escape from the sinking ship, which was locked at price levels of 700, 800 USD and above.
Of course, without detailed technical analysis of the BCHUSD, this gloomy picture looks ungrounded. To back up my words with fresh analytics, I suggest that we do a traditional panoramic analysis of Bitcoin Cash.
As usual, we begin the review with a monthly TF, let's look at the Bitcoin Cash chart above. Here a dramatic picture unfolds, similar to most other altcoins. We see that the April attempts to start a new bullish trend have been completely destroyed in the last three months. The last unclosed candle put this issue to an end, finally dropping the ticker to the root of a bullish impulse around 600 USD.
In my experience, counting on such support as a trend reversal is impossible. Below 600, a lot of stop orders of unfortunate bulls are accumulated, which are keeping their BiCash until the last moment. In a thin market, when you can push the market with relatively small effort, this is a real gift for a market maker, so I believe that the removal of stops on these positions can happen in the near future.
In the weekly BCH USD chart above, the graphic pattern of the descending triangle is quite clear. Statistically, this price pattern breaks down the horizontal support area downward. The targets for this pattern are equal to the length of the base of the triangle. In our case, if we draw an arrow, it will go far into the negative zone.
Of course, those who hold Bitcoin Cash are not in the mood for jokes, so I'll seriously say that if we break through the level of 600 USD, the next key level for support will be only 426 and 280 (these are the lows of November and October last year).
Judging by the oscillators in the weekly TF, there are no obvious signals for reversal, which only worsens the position of the bulls.
In the daily chart, we can observe the formation of bullish convergence using the MACD indicator. However, this fact is still not enough, as the convergence itself has not yet completed its formation, and secondly, it is too stretched in time, which weakens its effect.
The main point of convergence at the moment is just to highlight the approach to a significant level of support, which we already determined at the level of 600 USD even without it.
In the hourly chart, the last drop in the price of Bitcoin Cash looks even more dramatic. Honestly, it's ridiculous to read that the reason for the fall of this digital currency was the SEC, which unexpectedly postponed consideration of issues on the ETF to September 30.
Do you really believe that all previous growth was connected with the ETF? If you look at the history of these ETFs for a minute, the stock exchange filed the application on July 8. As we see, this news did not stop Bitcoin Cash BCH, and even Bitcoin from falling down till July 12.
All this only proves the manipulation and games of big fish on the market, who do not even really try to hide the traces of their interference.
Some insiders who knew about the forthcoming application could win a whole lot of money on this by buying the same futures for bitcoins (if you look closely at the chart, before the news, at the beginning of the blue arrow, there was a splash to buy bitcoin), and then sell it all on the hype wave and take the win.
But again, this may be my wild fantasy.
Summary for Bitcoin Cash outlook:
In the BCHUSD chart above, we see the return of the ticker to the bearish channel. At a price level of 600 USD there is a strong level of support, which can withstand the onslaught of bears for a while.
The breakdown of the support level is dangerous with the removal of stop orders, and therefore inevitable sales, which will lead us at least to the level of 523 USD (high of the November candle) The movement below will also be prevented by Fibonacci 1.618 at the level of 516 USD.
Fibonacci time zones indicate the boundaries of the bearish trend around August 13. It is likely that by this time, the market will go into consolidation at the reached levels in order to determine the direction of further momentum.
With this development, a bearish scenario with a price hike to the lower boundaries of the BCHUSD at 436 USD can be canceled only by a confident movement to 600 USD. But for this, internal manipulations alone are not enough: a strong change in the mood in the cryptocurrency market has to occur.
This is my forecast for BCHUSD, let's continue to watch the Bitcoin Cash rate.
Good luck and good profits!
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Real-time price chart of BCHUSD
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.