Key Takeaways
Bitcoin Cash (BCH) has recently experienced a significant bearish momentum, reflecting both impulsive and corrective wave structures across different timeframes.
The charts provided, covering the daily and 1-hour timeframes, offer a comprehensive view of BCH’s current price dynamics under Elliott Wave Theory, Fibonacci retracement levels, and RSI indicators.
BCH has been in a pronounced downtrend on the daily timeframe, marked by a five-wave Elliott Wave pattern.
Completing corrective wave (iv) near $444 coincided with rejection from descending trendline resistance, reinforcing bearish pressure.
Following this, BCH broke down sharply, penetrating the 0.618 Fibonacci retracement at $271, and has lost nearly 39% of its value since Friday.
Currently, it is hovering around $313 as it started recovering, but we can see further decline despite the wick on the daily chart, signaling support has been found.
The Relative Strength Index (RSI) has entered oversold territory, suggesting potential for a brief relief rally. However, the prevailing momentum remains bearish, with strong resistance around $388.29 (0.786 Fib retracement) and $397.53 (0.5 Fib retracement from the larger wave structure). This suggests any bullish attempts may face significant hurdles unless a decisive breakout occurs.
On the 1-hour chart, BCH is in the midst of an impulsive decline, specifically within wave (iii) of a larger downward sequence.
The rapid descent has already breached key Fibonacci extension levels, notably the 1.618 at $321.79, which is now being tested for resistance.
A minor corrective rally for wave (iv) is anticipated, potentially targeting $349.44 (1.272 Fib retracement) before resuming the downtrend. The final leg, wave (v), is projected to extend towards $241.86 (2.618 Fib extension), aligning with the broader bearish trend.
If selling pressure intensifies, BCH could decline to $211.32 (wave v target) or even $178.23 (3.414 Fib extension). Short-term bounces are likely but should be viewed within a dominant bearish structure.
On the other hand, today’s spike to $271 could have completed its long-lasting correction as the Y wave from the WXY since April had a high of $720. In that case, we can see the start of a new bull phase as the price of BCH enters its demand zone.
However, strong confirmations will be needed as the price needs to establish strong support before a larger recovery again brings it above the $400 horizontal zone.
Key Levels to Watch