The opinions expressed in the following analysis are those of the author alone, and the results of this analysis should not be construed as offering investment advice.
Bitcoin Cash has been experiencing significant bullish momentum ever since the final week of March. BCH has been observing a consistent uptrend, which has led to a price increase of more than one hundred and twenty percent. Nevertheless, during the past twenty-four hours, some of BCH’s upward movement has been halted, as the alternative cryptocurrency has come into contact with a level of strong resistance.
At the time this article was written, Bitcoin Cash had a registered market capitalization of over $17 billion and was trading at $905. This placed Bitcoin Cash as the 11th largest cryptocurrency on the market. BCH had a trading volume of $6.5 billion over the course of a 24-hour period, and its price increased by over 47 percent in just the past week alone.
The upward trend for Bitcoin Cash has finally run into some opposition around the $984 level; if the coin is unable to break through this range within the next twenty-four hours, then a trend reversal for BCH over the next week cannot be ruled out as a possibility. In this kind of situation, its objective may be the immediate support located at $801. In spite of the fact that there was yet another solid support in the $701 price range, a significant decline appeared improbable in light of the current state of the market.
Traders can profit from long positions and take profit somewhere around the $800 price level if the immediate resistance does not break.
Rationale
In spite of the fact that BCH’s prospects on the charts have appeared to be quite bullish for more than two weeks, a trend reversal may be on the horizon. The MACD indicator and the relative strength index (RSI) both point to a bullish outlook for the coin in the short term, as shown by the coin’s technical indicators. In any case, if one were to take a closer look at how the market has responded, it will provide us with a clearer picture of what to anticipate over the course of the following week.
At the time of publication, the Relative Strength Index (RSI) was well into the overbought zone, and it is interesting to note that the last time it occupied such a level was on February 21. The price of the alternative cryptocurrency experienced a significant drop the following day, which neutralised a significant portion of the bullish momentum it had been generating.
On the other hand, the MACD indicator went through a process that is known as a bullish crossover. At the time this article was written, a reversal to a bearish crossover did not appear to be imminent.
Important benchmarks to keep an eye out for
The starting price is $886.
Stop-loss price of $968
Take profit: $811
0.91 is the risk-to-reward ratio.
Conclusion
If the immediate resistance isn’t broken through in the next day’s time, there is a chance that the price of Bitcoin Cash will correct itself, which would result in a slight reversal of the trend. Traders who have short positions will have a chance to make a profit if the altcoin heads toward $800 in the coming week, as this would create a scenario consistent with the scenario described above.