The weekly time frame Bitcoin Cash chart shows that the price broke down from an ascending support trend line at the start of February. Before the breakdown, the trend line had existed for 539 days.
While BCH broke down from this diagonal support, it prevented a breakdown from the $305 horizontal support area. BCH bounced but failed to reclaim the ascending support trend line, creating a long upper wick (red icon).
So, whether BCH breaks down below $305 or reclaims the ascending support trend line can determine the future trend’s direction.
Technical indicators support a breakdown. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are falling. The RSI is below 50, while the MACD is negative, signaling a bearish trend.
So, the weekly chart gives a bearish BCH prediction. A decisive close below $305 can trigger a decline to the next support at $195.
Bounce or Breakdown?
BCH’s daily time frame gives mixed signals. BCH broke out from a descending resistance trend line after the RSI and MACD generated bullish divergences (orange).
However, the Bitcoin Cash price failed to sustain its increase, getting rejected from the 0.382 Fibonacci retracement resistance at $414. This created an upward A-B-C structure (black), which could continue the bearish trend.
While BCH still trades above the breakout level, it risks losing the minor support at $440, triggering a deeper decline. In the context of the long-term count, the increase could be wave X in a W-X-Y correction (red).
If the count is accurate, the BCH price has started wave Y. If it has 0.618 times the length of wave W, the BCH price will reach a low of $192, aligning with the long-term support at $195.
Alternatively, reclaiming the long-term ascending support trend line will mean the BCH trend is still bullish. Currently, this scenario is less likely.
Breakdown Incoming
The BCH price prevented a breakdown by bouncing at the $340 horizontal support area. However, the failure to reclaim its long-term support trend line points to a bearish trend.
As a result, a decisive weekly close below $340 can trigger a significant downward movement that takes the BCH price to a new yearly low.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
