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Bitcoin Cash Sees Gains, May Be Generating Bearish Triple Top Pattern (BCH/USD & EUR Analysis:May 24)

3 mins
Updated by Alexander Fred
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The price of Bitcoin Cash (BCH) reached a high of $432.9/€385.4 on May 20. After a decrease, similar prices were reached the next day.
This created an apparent double top pattern which was confirmed between May 22 and 23. On May 23, a bottom appears to have been reached. At the time of writing, the price was rising toward a possible triple top pattern. If this forms, we may expect the price to generate lower lows than those experienced on May 20 and 23. BCH Outlook

Bitcoin Cash (BCH): Trends For May 24, 2019

  • BCH/USD and BCH/EUR made a double top on May 20-21.
  • It has possibly created an inverse head and shoulders pattern.
  • It is trading inside a long-term ascending broadening wedge
  • Bearish divergence is developing in the RSI and the MACD.

Triple Top?

BCH/USD is analyzed at one-hour intervals from May 10 to May 24. This is done in order to trace the current trading pattern. In order to avoid confusion, we will not be using images of the BCH/EUR pair until we address the trade setups.

On May 20, Bitcoin Cash reached a high of $432.9. After a drop, similar levels were reached the next day. Another drop ensued.

Price movements are shown in the graph below:

Triple Top

The price is currently on its way to reaching these levels for the third time. This would effectively create a triple top, which is a bearish reversal pattern.

However, another hypothetical scenario is possible.

Another Possibility

After reaching a high on May 20, the price dropped to create a low of $381.0. Similarly, the price dropped again after reaching a second high on May 21. However, this time the drop was sharper and the price reached a low of $368.03. These two lows could provide the left shoulder and the head of an inverse head and shoulders (H&S) pattern. This pattern would be completed by another drop towards the $381 area, which would create the right shoulder. In this scenario, the triple top level of $430 would serve as the neckline of the pattern. However, the inverse head and shoulders is a bullish pattern. Therefore, these patterns cannot occur at the same time.

Which One Is It?

To determine whether its a triple top or head and shoulders pattern, the price of BCH is analyzed at daily intervals from Dec 2018 to May 2019 alongside the RSI and the MACD below to better

Bearish Divergence

In yesterday’s analysis, we stated that :

Since Dec 2018, the price of BCH has been trading inside an ascending broadening wedge. The resistance line was touched during the highs of Apr 3 and May 16.

Similarly, the RSI and the MACD made highs on Apr 3. However, they have since decreased.

This bearish divergence suggests that the price of BCH will continue dropping toward the support line.
Even though today we experienced short-term increases, this has not changed our outlook for BCH. The divergence is very significant in long-term timeframes, especially in the RSI, and these short-term increases do not sufficiently invalidate our hypothesis. Therefore, we believe that the triple top scenario succeeded by a breakdown is more likely than the inverse H&S succeeded by a breakout.

Assessment of Our Trade Setup For Bitcoin Cash (BCH)

Yesterday, we initiated a trade setup with

An average entry of $400 and €350. The stop-loss order is placed at $452.1 and €400.1, slightly above the May 16 highs. This is a stop loss of 13%. Our targets are set at $230 and €200 respectively.
BCH USD Trade BCH Euro Trade Today’s short-term increases brought the price slightly above our average entry levels. However, our stop loss is still significantly away. If our triple top scenario is completed, the price will eventually reach our target price of $230 and €202. For those interested in initiating this trade setup, they may find the current promotion from XCOEX attractive.

Do you think Bitcoin Cash will create a triple top pattern? Let us know your thoughts in the comments below.

Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona 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. (I do not have a discord and will not contact you first there. Beware of scammers)