Bitcoin Cash Struggling to Beat the Bitcoin as BCH/BTC Downtrend is Still Valid

Bitcoin Cash Struggling to Beat the Bitcoin as BCH/BTC Downtrend is Still Valid

Published: April 2nd, 2020

Bringing to your attention BCH/BTC crypto pair, which might be watched by many in terms of buying opportunity. Bitcoin Cash is the #5 coin ranked by Coin Market Cap with a total capitalization of $4,272,797,988. While being in the top 5, it is obviously one of the most interesting cryptocurrencies out there.

When traders chose altcoins most of the time they are seeking an opportunity to increase their profit in Bitcoin rather than US Dollar, and therefore we will look at Bitcoin Cash vs Bitcoin.

Daily chart

BCH/BTC Daily Technical Analysis 2 Apr 2020

Here is the daily chart where you can see the price action since the end of 2019. Starting from the beginning of 2020 there was steady uptrend up until mid-Februarry when the price has risen from 0.025 up to 0.048. This was a massive 90% move from BCH, although shortly after reaching the top price went down and broke below the uptrend trendline. We have applied the Fibonacci retracement indicator to the corrective wave up after the trendline break.

We can see that 127.2% Fibs at 0.03845 BTC have been rejected cleanly and the price went down sharply, testing 0.0275 recent low. The current phase looks like an upside correction from the major downtrend. During the past 5 days, the price has been dancing near the 0.035 BTC resistance area. This is a very important price level as it confirmed by two Fibonacci retracement levels. First is the 227.2% Fibs applied to the corrective wave up after the uptrend trendline break. Secon is the 23.6% Fibs applied to the resent upside correction that occurred between 12-19 Mach.

As long as this resistance level is holding and there is no daily close above 0.0354 BTC, the Bitcoin Cash downtrend is likely to continue. There are two potential support areas, first is around 0.031 and the second is around 0.275 BTC.

4-Hour chart

BCH/BTC 4-Hour Technical Analysis 2 Apr 2020

Now if we look at lower timeframes, specifically on the 4-hour chart, the downtrend trendline has been rejected along with the 200 Exponential Moving Average. On this chart, we can also see the importance of the 0.035 BTC resistance area. But, if the resistance get broken, it would invalidate bearish scenario a might, in fact, be the very first confirmation that the uptrend is about to begin.

1-Hour chart

BCH/BTC 1-Hour Technical Analysis 2 Apr 2020

The 1H chart shows that price remains within the descending channel. The upper trendline of the channel has been rejected cleanly on April 1 and the price went down sharply. We can see that Bitcoin Cash broke below the uptrend trendline and what is more important is a rejection of the 76.4% Fibonacci retracement level. This shows, that there is not enough buying power at the moment to send BCH/BTC price up to and pair is likely to move lower. But at the same time, the consolidation phase can be extended further, where the price will remain between 0.033 support and 0.0349 BTC resistance for around a week.

Summary

Bitcoin Cash doesn’t have enough power to go any higher, at least not yet. Price shows potential weakness in the short to medium term because multiple resistances are being rejected. Next week BCH/BTC price can drop towards 0.03 BTC physiological support area.

Downside targets

There are several downside targets to look at. First is 161.8% Fibs at 0.0327, the second is 261.8 Fibs at 0.031, and the third is at 0.0275 BTC, where the previous low was formed.

Probability of an uptrend

At this time the probability of an uptrend is low, although still quite possible as anything in trading. Expect an uptrend if the 0.0351 BTC resistance area will be penetrated with a clean break and close above on the daily chart. This could be a very strong buy signal and price could move up towards 0.0426 BTC resistance quite fast.

Support: 0.0317, 0.0313, 0.0275

Resistance: 0.0351, 0.0375

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