Bitcoin Cash (BCH) Approaches Massive Descending Resistance

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In Brief
  • Bitcoin Cash is following a long-term descending resistance line at $480.

  • Daily and lower time-frames have begun to show weakness.

  • BCH has likely completed an A-B-C corrective structure.

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The Bitcoin Cash (BCH) price is approaching a long-term descending resistance line that has been in place since 2018.

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While a short-term decrease could occur, Bitcoin Cash is expected to eventually be successful in breaking out above this resistance line.

 

Long-Term Bitcoin Cash Resistance

The weekly chart shows that BCH has moved above the previous resistance area at $318, created by the 0.5 Fib retracement level of the most recent decrease

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It is now approaching a long-term descending resistance line that has been in place since August 2018. If successful in breaking out, the next resistance area would be found at $480.

Technical indicators are bullish, supporting the possibility that BCH will reach the descending resistance line and eventually break out.

BCH Chart By TradingView

Cryptocurrency trader @mesawine1 stated that the BCH price has broken out from a long-term descending resistance line and is likely to increase all the way to $480.

However, as we saw above, BCH has likely still not broken out from this line.

Source: Twitter

Sign Of Weakness

The daily chart shows that BCH is following an ascending support line, currently found near $290. While this is a bullish development, BCH is trading considerably above this line, so would still mark a significant decrease.

Furthermore, BCH has created what appears to be a triple top pattern, which is combined with long upper wicks and a bearish divergence in the RSI.

However, the MACD and Stochastic oscillator are both still bullish.

BCH Chart By TradingView

A similar outlook is given by the six-hour chart, which shows an even more pronounced bearish divergence in the RSI and MACD.

Therefore, BCH could decrease in the short-term, possibly reaching a low near $308-$321 (0.5-0.618 Fib retracement levels) before resuming its upward movement and breaking out from the long-term resistance line.

BCH Chart By TradingView

BCH Wave Count

While the complete wave count is not entirely confirmed, the movement throughout November and December (highlighted) resembles a running flat A-B-C corrective structure.

If correct, it would mean that BCH has already begun a bullish impulse.

This would fit with the outline provided in the previous sections, in which BCH decreases in the short-term before breaking out.

BCH Chart By TradingView

BCH/BTC

The BCH/BTC chart does not look bullish at all. BCH broke down from the ₿0.027 support area in August and has been moving downwards at an accelerated rate since.

BCH/BTC is now in bearish price discovery, and there are no bullish reversal signs to suggest that the trend will flip anytime soon.

BCH Chart By TradingView

Conclusion

While the long-term trend for BCH/USD is likely bullish, a breakout from the descending resistance line is required to confirm this. A short-term decrease back to support could occur prior to the breakout.

BCH/BTC is in bearish price discovery and is showing no signs of a bullish reversal.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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