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Bitcoin Cash Price Falls 40% – BCH Wave Count Shows Completed Correction

Last Updated May 10, 2024 8:48 AM
Valdrin Tahiri
Last Updated May 10, 2024 8:48 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The Bitcoin Cash price has corrected nearly 40% since reaching its yearly high of $720 on April 5.
  • BCH bounced on May 1, but it is unclear if this marked the end of the corrective wave four.
  • Can the BCH price maintain its increase above the critical confluence of supports at $444?

Bitcoin Cash underwent its second halving   on April 3. Even though the event contributes to a lower inflation, the price has been dropping since the event. 

BCH bounced on May 1, but has yet to create the first steps of its bullish structure. BCH was one of the best performers in the first quarter of 2024. The trend can continue if BCH confirms its bullish reversal.

Has BCH Completed Its Correction?

The daily time frame wave count shows that BCH started a five-wave increase in June, which led to a high of $720 on April 5. Wave three extended, and the sub-wave count is in black. 

A bearish divergence in the daily RSI led to the ongoing decline, which took the BCH price just below the 0.5 Fibonacci retracement support level of $444. The ensuing bounce reclaimed this level. 

Even though the 0.5 Fibonacci retracement support level is suitable for the end of wave four, it is unclear if the correction is over due to the lack of momentum shown by the RSI. 

Bitcoin Cash Wave Count
BCH/USDT Daily Chart | Credit: TradingView

The RSI has not generated any bullish divergence and is still below 50.

So, a look at a lower time frame is needed to figure out if the correction is over. In case it is, the first target for the top of wave five is at $914. The 1.61 external retracement of wave four (black) creates this target.

The six-hour time frame reiterates the importance of the $444 level, which is both a horizontal and a Fibonacci support level. Also, the May 1 BCH price decrease below it was just a deviation (green circle).

Finally, the six-hour RSI generated a notable bullish divergence (green) before the reclaim. 

Short-Term Bounce
BCH/USDT Six-Hour Chart | Credit: TradingView

In order for the correction to be over, BCH has to maintain its increase above the $444 area and validate it as support. 

If so, it will likely begin wave five toward the previous target of $914.

Conversely, breaking down below this area can deepen the correction toward the 0.618 Fibonacci retracement support level of $380.

What Happened During the Previous Halving?

The first Bitcoin Cash halving took place on April 10, 2020 (white). At the time, BCH was trading at $250. After the halving, the BCH price entered a 250-day consolidation period where it moved in a 50% range.

This ended in December 2020 when the BCH price began a parabolic upward trend that led to a high of $1,644 in May 2021.

Bitcoin Cash Halving Similarities
BCH/USDT Weekly Chart | Credit: TradingView

The BCH price movement preceding the current halving is nothing like the one in 2020. Then, the price was correcting for nearly 300 days before the halving, while it has been on an upward trend this time around.

Additionally, the weekly RSI was at 50 in 2020 and is deep into overbought territory at 75 at this point in time. Therefore, both the movement and indicator readings are dissimilar in the 2020 and current halvings.

BCH Price Prediction: What Happens This Time After the Halving?

The daily time frame chart shows that the BCH price is in wave three of a five-wave upward movement (white) that started in June 2023. The sub-wave count is in black, showing an extended wave three, which ended with a high of $705 on April 1.

The sub-wave count shows a completed five-wave formation, which ended at the 1.61 external Fibonacci retracement of sub-wave four.  So, it is possible that the long-term wave three has ended.

Bitcoin Cash Price Prediction After Halving
BCH/USDT Daily Chart | Credit: TradingView

The daily RSI generated bearish divergence during the high, a sign often associated with tops. If the upward movement has in fact ended, BCH can correct toward the closest support at $460 before resuming its long-term upward trend.

This bearish prediction will be rendered invalid if BCH climbs above $705. Then, the price can immediately move to the next resistance at $834.

Bitcoin Cash Corrects After Halving

The BCH movement preceding the 2020 and 2024 halvings are, as we have already said, nothing alike. The wave count and indicator readings predict that Bitcoin Cash will first correct after the halving before eventually resuming its upward trend.

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