Key Takeaways
Bitcoin Cash (BCH) has been in a descending triangle since its Dec. 6 peak of $645 and is currently testing the horizontal zone.
Two outcomes are ahead depending on the interaction result, but which one is more likely?
The daily chart of BCH reflects a completed five-wave impulsive structure (wave 5) peaking near $716, followed by an ABC corrective wave leading to a pronounced support zone around $300 (slightly below 0.618 Fibonacci retracement).
This region has proven critical as both a consolidation and reactionary pivot in past price movements.
Since then, another rise has been seen, but the price made a lower high of $645 on Dec. 6 before another downturn to the $400 horizontal zone, where it currently tests for support.
The Relative Strength Index (RSI) on the daily chart is neutral but hints at bearish divergence, indicating weakening upward momentum.
Failing to hold the $388 zone could accelerate selling pressure toward deeper retracement levels.
However, a decisive break above $472 (0.382 Fibonacci level) would invalidate this bearish outlook and point to a recovery wave.
The current Elliott Wave count suggests two possible outcomes. BCH may be forming a complex WXY corrective pattern, while on the other hand, it could have already ended its correction as an ABC to $300.
According to the bearish count, wave W ended with a local bottom of around $300, while Wave X retraced sharply to $645 before reversing. Wave Y is developing, targeting lower support levels near $322 (0.618 Fibonacci retracement) and $215 (0.786 Fibonacci retracement).
Zooming into the 1-hour chart, BCH’s price action reveals a descending triangle consistent with a correction since the Dec. 6 high.
Either the correction ended as an ABCDE on today’s support interaction or has a breakdown potential.
The sub-wave count indicates the continuation of wave(iii) from the recent interaction with the descending resistance on a high of $510, as the wave (iv) of the higher degree count.
A final leg down as subwave (v) is anticipated, targeting values below $300.
Wave Y’s projected bottom aligns with Fibonacci clusters near $291–$270, indicating target support. If BCH fails to hold this level, deeper bearish extensions to $241 (2.618) or $215 (0.786 Fibonacci retracement from the daily chart) become viable.
Conversely, a breakout above $432 (0.236 Fibonacci retracement) could signal the start of a corrective rally, with bullish targets at $472 or $511.
RSI on the 1-hour chart is approaching oversold levels, which may trigger a temporary bounce.
However, continued RSI divergence from price suggests that the recovery may remain capped below immediate resistance.
BCH declined 10% from yesterday, falling to its key horizontal support zone. Two outcomes are ahead, with a breakdown or a bounce determining the next phase.