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Bitcoin Cash [$BCH] fell below a range that it had traded within for over two years. The critical support level at $272 was shattered by the selling pressure in May. A test of the $188 long-term support yielded a bounce to $240, which has begun to reverse since the end of June.
The altcoin’s relative strength against Bitcoin [BTC] evaporated in May. In that month, $BCH had shed nearly 42%, a sizeable decline that continued into June.
With Bitcoin struggling to climb back above $67k, and the market maintaining a bearish bias, here’s what Bitcoin Cash investors need to watch out for.
Will Bitcoin Cash bulls sink or swim at $200?
As covered earlier, the downward momentum picked up in May. The MFI raced from 49.8 in the second week of May to 14.64 by the third week of June. Similarly, the CMF also slid below -0.05 to indicate incessant selling underway.
In August 2023, the swing low at $165.4 had been the one that propelled the Bitcoin Cash uptrend up to $719. Therefore, this swing low is the one that must be breached to flip the weekly swing structure bearishly.
It appeared likely that this bearish scenario would soon unfold.
Lower timeframe Bitcoin Cash price action shows bullish signs
The 4-hour chart had a bullish swing structure. The CMF was at +0.12, showing buying pressure was dominant. Yet, the token was in a retracement phase. Over the past week, the buyers have desperately defended the $209.3 support.
A drop toward $196.9 would not be a buying opportunity, given the higher timeframe downtrend.
The rally toward $255 likely came as a liquidity hunt. There still is a pocket of unswept short liquidations around $260. The rally earlier this month peaked at $255 and has retraced since then.
In the short-term, despite the H4 chart’s structure, a bounce up to $227 and $243 were possible. It was more likely that prices would continue below $200, due to the bearish momentum seen since May.
Final Summary
- The Bitcoin Cash range of over two years was shattered by the strength of selling in May and early June.
- The long-term bearish momentum is likely to continue and push $BCH below $200.