Bitcoin Cash (BCH) price is approaching the long-term descending resistance line, which has been there since 2018.
While a short-term decline is probable, Bitcoin Cash is expected to eventually succeed in breaking out of this resistance line.
Long term resistance for Bitcoin Cash
The weekly chart shows that BCH moved above the previous resistance zone at $ 318, created by the 0.5 Fib retracement level of the most recent decline.
It is currently approaching the long-term descending resistance line that has been in place since August 2018. If a breakout succeeds, the next resistance zone will be found at $ 480.
The technical indicators are bullish, supporting the possibility that BCH will reach the descending resistance line and eventually a breakout.
Signs of weakness
The daily chart shows that BCH is moving to the ascending support line, currently found near $ 290. Although this is a bullish development, BCH is trading significantly above this line, so it still marks a significant level of correction.
Furthermore, BCH has created a three-top pattern, combined with long upper wicks and a bearish divergence in the RSI.
However, both MACD and Stochastic oscillator are still increasing.
A similar outlook is given on the six-hour chart, showing more pronounced bearish divergence in the RSI and MACD.
Hence, BCH can drop in the short term, possibly reaching a low of close to $ 308- $ 321 (the Fib retracement level of 0.5-0.618) before resuming its upward movement and a break above the long resistance line. term.
While the complete wave count is not fully confirmed, the movements during November and December (marked) are like a flat A-B-C corrective structure.
If true, it means that BCH has started a bullish impulse.
This would be in line with the scenario outlined above, in which BCH will drop in the short term before a breakout breakout.
BCH / BTC
The BCH / BTC chart doesn’t look bullish at all. BCH broke below the 0.027 BTC support zone in August and has been moving down at a rapid pace ever since.
BCH / BTC is currently in the process of price discovery on the downside, and there is no sign of a bullish reversal suggesting that the trend will reverse anytime soon.
While the long-term trend for BCH / USD is likely to rise, a break above the descending resistance line is needed to confirm this. A decline to short-term support is possible before a breakout.
BCH / BTC is in the process of price discovery on the downside and there is no sign of a bullish reversal.