Key Takeaways
- Bitcoin Cash is consolidating between $385 and $410, sparking debate over its ability to rise to $500.
- A bullish reversal pattern has formed, with the neckline at $389.34 supporting BCH.
- Buying pressure is building, increasing the likelihood of a Bitcoin Cash price breakout above $444.53.
After registering a 16% surge within the past month, Bitcoin Cash (BCH) price has been trading sideways. Since last Wednesday, the cryptocurrency has been moving between $385 and $410.
The recent pullback has sparked speculation that Bitcoin Cash’s price may no longer be on track to hit $500. However, several indicators suggest otherwise—this looks more like a brief pause before another exponential rally.
BCH Hovers at Neckline
According to the daily chart, Bitcoin Cash price has formed an inverse head and shoulders pattern. The inverse head and shoulders pattern is a bullish reversal chart pattern that typically forms after a downtrend.
It begins with a price fall (left shoulder), then another lower low (head) before the price rises and hits another drop. Amid this pattern formation, a resistance line, called the neckline, connects the shoulders and head.
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When the price breaks below the neckline, the trend is bearish. But in this case, the neckline of Bitcoin Cash’s price rests around $389.34, and bulls seem to be defending it despite overhead resistance at $430.88.
In line with this move, the Chaikin Money Flow (CMF) has risen to 0.10. The rise in the CMF reading indicates rising accumulation, which outpaces distribution.
If this trend continues, BCH’s price might experience a break above the overhead resistance.
BCH Price Analysis: Surge Incoming
Furthermore, other indicators like the Supertrend also support the move. The Supertrend is a technical indicator that measures trend and direction.
Typically, when the green line of the Supertrend is below the price, the trend is bullish and indicates strong support. On the other hand, if the red line of the indicator is above the price, it represents resistance, indicating that the price could drop
At press time, the green line of the Supertrend sits below BCH’s price. The Accumulation/Distribution (A/D) line has also risen following the development.
The rise in the A/D line indicates increasing buying momentum. If this continues, Bitcoin Cash’s price might climb past the overhead resistance at $444.53.
If validated, BCH could ride a smooth ride to $490.49 at the 0.382 Fibonacci level. If this happens, Bitcoin Cash’s price might surpass $500 within a few weeks.
On the flip side, if the altcoin fails to break the 0.618 golden ratio at $398.56, the cryptocurrency’s value might not rise toward $500. If that is the case, BCH could decline to $333.12.
The cryptocurrency’s market value might drop below the $250 mark in a highly bearish scenario.
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.
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