- Diminishing buying power stalled at $514.90 leaving $520 untested.
- The bears have remained largely in control limiting massive retracement north.
Bitcoin Cash daily chart portrays a bearish picture in the near-term. This follows the formation of a bearish flag pattern. The incredible surge from April cemented the position of the price above the 50-Day Moving Average. This allowed the bulls to increase their entry position confident that Bitcoin Cash was ready to scale the levels.
BCH/USD daily chart
The price initially broke above the resistance at $240 and $300 respectively, before pushing BCH past the next hurdles at $320 and $400. The massive rally did not stop here as the price stepped above $440, 480 and $500 barriers. Continued bull momentum sent BCH/USD above $500. However, diminishing buying power stalled at $514.90 leaving $520 untested.
Unfortunately, this signaled the bears who had been at the mercy of the buyers for more than three months. A correction began towards the end of June. The declines pressed Bitcoin Cash under the 50-Day Moving Average as well as the 100-Day Moving Average.
The breakdown saw the price dive below $400 tentative support. Re-energized bears had field day with Bitcoin Cash sending it under $300. The next support target at $280 did little to stop the declines. However, a low formed at $255 mid-July gave way for recovery.
The shallow recovery within a bearish flag pattern stepped above $300 and reclaimed the support at $340 at some point. Nonetheless, the bears have remained largely in control limiting massive retracement north.
At press time, Bitcoin Cash is trading at $330. The upside is capped by the 50-day Moving Average. At the same time, a short-term support target is at $320. The stalemate due to the market indecision means that sideways trading is expected between $340 resistance and $320 support. Reaction to the bearish flag pattern could result in the price testing $300 support, Correction past $280 could see the primary support at $255 refreshed.
BCH Key Technical Picture:
MACD: Bullish divergence suggests an impending upward correction.
Bearish flag pattern: Hints breakdown to $300 and $280 support areas.
Trend: Sideways between $320 and $340 range.