From the first days of this year, Bitcoin Cash (BCH/USD) was moving higher, while trading above its short-term upside support line taken from the low of January 3rd. But on February 16th, the crypto took a strong hit and gapped down below that line. After that, BCH/USD did recover some of its losses, but eventually slid back down again. Now the price is close to testing its key support area, at 365.00, which is the current low of February. For now, we will take a bearish approach, but will wait for a break below that area in order to get comfortable with further declines.
As mentioned above, we will get more comfortable with lower areas, if we see a price-drop below the 365.00 hurdle. This way, more sellers could join in and drive the crypto lower. That’s when we will target the 337.00 obstacle, or even the 324.00 hurdle, marked by an intraday swing high of January 24th. BCH/USD might get a hold-up around there, or even correct back up a bit. However, if the bears are still feeling comfortable, another test and a break of the 324.00 zone may clear the path to the 295.00 level, marked by the lowest point of January.
Although our oscillators, the RSI and the MACD, are well below their equilibrium lines, still, there is a bit of room for some more downside. The RSI continues to drift below 50 and the MACD remains below zero and its trigger lines. Both indicators are currently somewhat in support of the downside scenario.
The alternative scenario here could be triggered if the price rises above the 427.00 area, which is the high of February 18th. If so, we will then aim for the 456.00 obstacle, a break of which may clear the path to the 496.00 level, marked by the current highest point of this year.
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