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The Bitcoin Cash (BCH) price has declined since its yearly high of $328. The decrease took the price below the crucial horizontal resistance of $280.
Despite this drop, the daily time frame outlook suggests that a bottom will be reached soon, and the BCH price will eventually bounce back to a new yearly high.
Bitcoin Cash Price Continues Trading Below Long-Term Resistance
The analysis of BCH’s weekly chart indicates that its price has been following a declining resistance line since May 2021. During this period, the lowest price BCH reached was $86, just slightly above its all-time low of $81 in December 2018.
However, there has been a significant growth in BCH’s price since then. In January 2023, it finally broke free from the descending resistance line that had constrained it for 609 days.
After the breakout, there was a brief retracement to its pre-breakout levels in June, but BCH experienced a strong rebound after forming a bullish double bottom pattern (green icons). This pattern often leads to substantial upward movements, as has been the case in BCH.
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Nevertheless, BCH fell after reaching a new yearly high of $329 in June. The fall coincided with a large withdrawal by miners and a negative report about the BCH reserves of Binance.
The price now trades below the $280 resistance area. A return to the area would be an increase of 26% while a drop to the closest support of $140 would amount to a decrease of 38%.
The ongoing price increase is supported by the weekly RSI, a momentum indicator used by traders to assess market conditions. When the RSI reading is above 50 and trending upwards, it indicates a potential bullish trend, and in the current situation, the RSI is above 50 and steadily increasing, both positive indicators of a bullish trend.
Furthermore, there was a bullish divergence (green line) preceding the entire upward movement. This is an encouraging sign commonly associated with bullish trend reversals, adding credibility to the ongoing price increase.
BCH Price Prediction: Where Will Price Bottom?
The analysis of the daily time frame suggests a positive outlook for BCH due to the wave count analysis. In the long term, the wave count indicates a strong bullish trend. Using Elliott Wave theory, analysts study historical price patterns and investor psychology to determine the likely trend direction.
According to the wave count, BCH has initiated a five-wave upward movement, with the third wave extending, which is commonly observed in such increases. On July 18, the price rebounded from the 0.382 Fibonacci retracement support level. This level suggests that after a significant price movement, prices tend to partially retrace to a previous level before resuming their original direction.
However, the BCH price fell below the Fib support yesterday. Due to the concept of alternation, wave four is likely to be sharp and quick, since wave two was elongated.
If the wave count is accurate, BCH’s price is expected to complete wave four near the 0.5 Fib retracement support level at $204.
Afterwards, it can complete the entire upward movement within the range of $380-$400. This target range is derived from the 4.21 extension of wave one and the 1.61 external retracement of wave four, indicating a potential bullish movement.
In such a scenario, the price would increase by approximately 90% from the projected bottom at $204. However, falling below $204 would heavily indicate that the count is not correct, though it would not confirm it. In that case, the BCH price could fall to at least $160.
Despite this bullish BCH price prediction, falling below the wave one high at $156 will confirm that the count is incorrect. In that case, the BCH price could decrease to $100.