Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Bitcoin Cash has been in a strong downward trend since mid-November. Selling pressure was relentless and the market structure remained bearish. Bitcoin was also not in a pretty spot on the chart as it had multiple levels of strong resistance. Therefore, it seemed likely that Bitcoin Cash could climb towards the $315 area to hunt for liquidity before turning sharply downwards.
The previous lower high for BCH was at $315. Above that was a horizontal, long-term significant level of $326. Over the past two months, $340 has also been an area where buyers have run out. All things considered, the $300-$315 could be a much more attractive selling opportunity than an area to take long positions.
BCH has found support at the $275 level, with declines to $260 and $270 seeking demand. A daily session of less than $275 would probably mean BCH was ready for its next leg down.
Very often, before the next leg in a trend, the price returns to a previous area of interest in search of liquidity. For BCH, it was in the $315 area at the time of going to press. A move higher for BCH could fool some market participants that further gains were imminent and could convince some buy orders to be executed. The price can then turn sharply and force the late buyers to sell, fueling the decline.
The daily chart’s RSI had been in oversold territory for more than a week before going to press. The 27-28 area is a place where the RSI has tended to bounce in the past, but at the time of writing, RSI was knocking at this level from below. This highlighted the extreme bearish conditions of recent days, and a rally of relief could ensue from oversold territory.
The Awesome Oscillator was well below zero. This demonstrates the strong downward momentum seen in recent weeks. However, it has registered green bars for the past week, indicating that bearish momentum has slowed.
The OBV continued to fall sharply and no significant buying volume was seen.
The $315-$325 area remained one to watch out for. It wasn’t impossible that BCH could climb past $325 and turn it around to support in the coming weeks, but the most likely scenario was that a move to these previous lower highs would give BCH the fuel it needed for the next one. stage down.
This post Bitcoin Cash could climb to this level before the next leg goes down
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