Disclaimer: The conclusions of the following analysis are the sole opinion of the author and should not be taken as investment advice.
Bitcoin Cash just after reversing from the $390 area in early April [BCH] Was on a steep journey south. For the most part, the price is now hovering near the lower band of the Bollinger Bands (BB).
An attractive close below the 3-month trendline resistance (yellow, dashed) will extend a sustained attack on the chart.
Any close above BB’s baseline can support buying efforts to invalidate the bearish trend. At press time, Bitcoin Cash was trading at $109.6, down 1.39% over the past 24 hours.
bch daily chart
The bears have made the most of the growing sentiment scare by dragging the BCH to its new multi-year lows. The 3-month trendline resistance has clearly set the buy potential low.
The altcoin was down 74.4% (since April 5) as it plunged to its December 2018 lows a few days ago. BCH hit a 42-month low on June 30.
The altcoin could enter a squeeze phase in the coming days, looking for a convergence of the BB lower and upper bands. Also, trading volume declined during the recent recovery of the upchannel. There was a faint move higher in this reading.
Any close below the immediate resistance will further pull BCH towards the $101 level. After that, a bullish revival attempt may encounter an obstacle near the control point (PoC, red). An immediate rebound in the $120 area might be short-lived.
For the past three days, the bearish RSI has hit the 42 resistance. A sustained position below this level will help sellers in conflicting sell-offs on the chart.
Additionally, OBV has been making lower highs over the past week and breaking out of a bearish divergence with price action. In fact, the DMI lines have yet to complete a bullish crossover.
Given the confluence of odds near the POC, BCH could extend its sluggish phase in the coming days. The goal remains the same as above.
However, BCH shares a 91% 30-day correlation with King Coin. Therefore, it is important to keep track of Bitcoin’s movement in order to make an accurate decision.