Bitcoin Cash (BCH) Attempts to Hold on to $200 Support

Current Resistance

The BCH price has been declining since February 16, when it reached a high of $496. The price reached a bottom on March 13, then began an upward move that took it to $275 on April 8, and has been declining since. This validated the $275 area as resistance, which is also the 0.382 Fib level of the entire downward move. The price is also facing resistance from both the 50 and 200-day moving averages (MA), which have made a bearish cross. Until the price breaks out above both these MAs and the $275 resistance area, the price action is bearish. The closest support area is found at $200.

Wave Count

Cryptocurrency trader @TheEWguy outlined a BCH Chart, in which he predicts a final drop towards $170, before a long-term upward move towards $700.

If the wave count is correct, then BCH is in the process of completing the C wave inside an A-B-C correction. Projecting the height of wave A to wave C gives us a target of $200, which is in line with our support area from the previous section. Furthermore, it coincides with the support line of a parallel channel connecting the beginning of wave A and the top of wave B. The most likely reversal area would be between the 0.5 – 0.618 Fib levels at $190 and $208. If the price declines below the lower bound, then the wave count could be wrong and BCH may make another lower low.

BCH/BTC

The chart for BCH/BTC is much more straightforward. The price has been trading inside a long-term descending wedge since it broke down from the ฿0.0287 support area on May 2. The descending wedge is a bullish reversal pattern, and the possibility of a breakout is also strengthened by the growing bullish divergence on the daily RSI. Therefore, an eventual breakout from this pattern is likely, with the price revisiting the ฿0.0287 area once more. A breakout above this level would indicate that the long-term trend is bullish.