Despite decent gains today, bitcoin cash prices could take a hit in the short-term, the technical charts suggest.
As per data source , bitcoin cash (BCH) has appreciated 9 percent in the last 24 hours. The cryptocurrency is strongly bid above $2,700, yet is still down 35 percent from its record high of $4,330 set on Dec. 20.
During the bitcoin rally from Sep. 15 low to November highs, BCH witnessed a sell-off to $400. Also, as bitcoin (BTC) neared the $20,000 mark in December, investors began diversifying into the “small cap” cryptos like bitcoin cash.
Thus, to some extent, BCH has an inverse relationship with bitcoin. And with BTC , the BCH/BTC chart indicates that bitcoin cash is likely to underperform its rival in the short-run.
The above (prices as per Bitfinex) shows:
- The rally following a bullish falling channel breakout (on Dec. 19) ran out of steam at BTC 0.25.
- Over the last one week, 0.20 has acted as a strong resistance.
- A bearish crossover between the 5-day and 10-day moving averages was confirmed on Dec. 28. At press time, the moving averages are descending (favoring the bears).
Hence, bitcoin could gain an upper hand in the short-run – i.e. BCH/BTC could drop to 0.15 and possible to 0.10 in the short-term. The chart adds credence to the bullish case put forward by the (below) and points to a possible depreciation in the bitcoin cash-U.S. dollar (BCH/USD) exchange rate.
The above (prices as per Bitfinex) suggests prices could revisit the $2,000 mark as:
- The falling tops/lower highs pattern, indicates the bulls are losing control.
- BCH re-entered a falling channel on Dec. 30 and prices may move back above the falling channel hurdle this week.
- The bearish crossover between the 5-day and 10-day moving averages was confirmed on Dec. 27. The 10-day MA seems to have shed the bearish bias, but the 5-day MA is still sloping downwards in favor of the bears.
- Bitcoin cash could revisit $2,050 (Dec. 30 low) and may extend losses to the falling channel support of $1,850.
- Only a close (as per UTC) above $2,800 would abort the bearish view.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.