Bitcoin Cash Technical Analysis: Ascending Channel’s Support Has Been Retested. Now what?

Bitcoin Cash Technical Analysis: Ascending Channel’s Support Has Been Retested. Now what?
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From Saturday when the price of Bitcoin Cash was $167.8 which is the highest price has been since January, measured to the lowest levels the price has been today which was at around $152.5 we have seen a decrease of 9.76%.

The price has recovered since, but only slightly as it is currently being traded at around $155.8 which is around the horizontal support level, broken on the yesterday’s decrease and is now likely getting retested for resistance.

On the hourly chart, you can see that the price came down below the significant support point today but ended on the ascending trendline which is the support level from the ascending channel formed by the last two wave movements. This is why we can’t say that a breakout to the downside occurred, not before the price falls further to the downside below it.

It again served as support which was indicated by the large wick from the downside on the previous hourly candle as buyers have pushed the price immediately to the upside in an attempt to go above the horizontal resistance level, but the momentum hasn’t been strong enough as the price was stopped out at those levels again proving that there is strong resistance there.

Now that the price started to recover and has interacted with its support level we could see another increase to the upside which would be corrective in nature with potentially going back to the levels from which the decrease was made or even slightly higher for another interaction with the ascending channels resistance level.

This would bring the price Bitcoin Cash to slightly over $170 level if it happens and it could happen like we have seen in the case of Litecoin as the five-wave move to the upside ended with an ending diagonal, similarly to what we can see on the chart of Bitcoin Cash.

If this bearish momentum seen from Saturday continues and I believe that it would, as the price increased impulsively to the upside, we could be seeing the start of the expected downmove. But if the upswing hasn’t ended then another increase could be made before the expected downmove starts.

Zooming out on the 4-hour chart, you can see that my projection points out that we are seeing the ends of the Intermediate Y wave as a three-wave move to the upside which means that after it ends another corrective structure to the downside would develop, and if the 5th impulsive move to the upside ended on Saturday we could be seeing the beginning of that downward move.

There is a possibility of another increase in which case the price could go for a breakout to the upside from the current ascending channel in which case the significant resistance point would be at around $180. But when it ends I would be expecting to see the price of Bitcoin Cash back to the vicinity of the Minor Z wave ending point which would be around $107.

This expected downward move could be the beginning of the trend continuation of the Intermediate correction ended or could be the second wave X if the correction gets prolonged which we are to see from the momentum behind the move.

About Nikola Lazic