Bitcoin Cash (BCH) Price Rejected by Key Resistance, Is a Sell-Off Happening?
The price of Bitcoin Cash (BCH) has been rejected by a strong resistance zone and is currently trading within a bearish pattern. It is likely to decrease in the near future.
The price of Bitcoin Cash (BCH) has decreased since reaching a yearly high at $330 in late June 2023. During this period, the price dropped nearly 50% to the previous resistance zone at $155-$165 before recovering (green arrow).
The confirmation of the previous long-term resistance as support suggests that the long-term trend might have shifted to an uptrend.
The weekly RSI (Relative Strength Index) supports this possibility by staying above the 50 level since the correction occurred.
However, the BCH price is currently facing a very strong resistance zone at $265, formed by horizontal resistance and the 0.618 Fibonacci retracement level. It was rejected by this zone last week with a pinbar candle with a long upper wick (red arrow). This indicates strong selling pressure at higher levels.
Due to the conflicting signals between the indicators and price action on the weekly timeframe, we will analyze lower timeframes to determine the next move.
Ascending Parallel Channel
The daily chart shows that the BCH price has been trading within an ascending parallel channel since bouncing from the previous resistance zone at $155-$165 on August 17. This is a bearish pattern, often leading to breakdowns in most cases.
The daily RSI has created a bearish divergence and is sloping downwards, supporting the possibility of a breakdown.
In fact, the price decreasing below the middle line of the channel and getting rejected afterward (red arrow) is also supporting this possibility.
Therefore, the BCH price is likely to break down below the channel and decrease to the nearest horizontal resistance at $207 and even lower to $185.
The most likely scenario suggests that the BCH price will be rejected by the $265 resistance zone and decrease in the near future. The immediate target is found at $207, with further potential to reach $185.
However, since the long-term trend has shifted to an uptrend, this could be a correction within the overall uptrend.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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