Following an obvious price pump last week, Bitcoin Cash (BCH) has undergone what looks to be a subsequent dump — or is it just a correction?
Taking a look at the four-hour chart — where every candlestick represents a timespan of four hours — we can see that BCH is continuing to head down to our target support levels at 0.08 BTC and below. It appears the price is set to test 0.08. (Though, at the time of this writing, it is hanging out around 0.08223.)
If we can see a strong bounce off 0.08 support with significant buy-volume, it may we worth considering making a short-term swing trade. However, one should always weigh the risk and reward of any trade — and this trade is everything if not risky at the moment.
Instead of trying to catch a falling knife, it’s always safer to wait for price-strength confirmation. When BCH pumps, it pumps pretty fast. The only question is whether or not it will actually pump again, with the fork only days away.
Relative Strength Index
The Relative Strength Index (RSI) on the four-hour chart is heading down towards oversold levels, which is generally a solid place to consider making an entry. During last week’s pump, it spent a significant amount of time in overbought territory — so it would be optimal to see BCH hang out in oversold territory for at least a little while.
If you’re a serious trader, it may be worth watching the Bitcoin Cash (BCH) chart over the next few days.
There is always a lot of attention before a hard work, but the sharks tend to feed by buying the rumors and selling the news. This makes us wonder: is there enough interest in Bitcoin Cash and the coins which will come out of the split to push the price up?
That’s for you to decide.
[Disclaimer: This is not financial advice, and should not be construed as such. BeInCrypto and the author are not responsible for any financial decisions, gains, or losses made by any readers. Trading in cryptocurrency is risky, and we advise consulting with a trained financial professional before making any trades in the volatile space.]