Following its peak at $328 for the year, the Bitcoin Cash (BCH) price has experienced a decline. This decline led the price to dip below the significant horizontal resistance level of $280.
However, even in light of this decline, the daily timeframe analysis indicates a forthcoming bottom and a subsequent recovery in the BCH price, ultimately leading to a new annual high.
Bitcoin Cash Price Falls by Nearly 30% After Rejection
The weekly analysis of BCH’s chart reveals that its price has been tracing a descending resistance line since May 2021. The lowest point BCH reached throughout this period was $86, slightly above its all-time low of $81 in December 2018.
However, a significant surge in BCH’s price has been observed since then. In January 2023, it managed to break free from the descending resistance line that had confined it for 609 days.
Following the breakout, there was a brief retracement to levels prior to the breakout. However, BCH rebounded strongly and accelerated its rate of increase in June, attaining a new yearly high of $329. But the price has fallen since.
This decline coincided with a notable withdrawal by miners and an adverse report concerning BCH reserves associated with Binance.
Currently, the price is trading below the resistance area at $280. A return to this zone would represent a 26% increase, while a drop to the nearest support level at $140 would equate to a 40% decrease.
The ongoing upward price momentum is supported by the weekly Relative Strength Index (RSI), a momentum indicator employed by traders to gauge market conditions. When the RSI reading surpasses 50 and demonstrates an upward trajectory, it suggests a potential bullish trend.
Presently, the RSI sits above 50 and is steadily climbing, both of which are positive indications of a bullish trend.
Moreover, a bullish divergence (illustrated by the green line) preceded the entire upward movement. This favorable sign is often associated with reversals in bullish trends, lending additional credibility to the ongoing price surge.
BCH Price Prediction: Has a Bottom Been Reached?
The analysis of the daily time frame suggests a favorable outlook for BCH, mostly because of the Elliott Wave Theory. In the long run, the wave analysis indicates a robust uptrend. By applying the Elliott Wave theory, experts examine past price patterns and investor behavior to ascertain probable trend directions.
Based on the wave count, BCH has initiated a five-wave upward movement with an extended third wave, a common occurrence in such increases. On July 18, the price experienced a rebound from the 0.382 Fibonacci retracement support level. This level implies that following a substantial price shift, prices tend to partially retract to a previous level before resuming their original trajectory.
The BCH price dropped below the Fibonacci support recently but is currently attempting to reclaim it. Assuming the wave count holds true, BCH’s price is projected to finish wave four at either the 0.382 Fib or near the 0.5 Fib support level, which stands at $204.
Subsequently, there’s potential for the upward movement to culminate within $380 to $400. This target range is determined by the 4.21 extension of the initial wave and the 1.61 external retracement of wave four.
Under such circumstances, the price could appreciate by approximately 80% from the current price. However, dropping below $204 would strongly suggest an incorrect count, even though confirmation wouldn’t be definitive.
In such a scenario, BCH’s price might potentially decrease to at least $160, a drop of 34% measuring from the current price.
Despite the bullish price prediction for BCH, breaching the peak of wave one at $156 would invalidate the count.
Should this happen, the BCH price could potentially descend to $100.
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