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The Bitcoin Cash (BCH) price has increased since August 17, breaking out from a corrective pattern in the process.
While the weekly timeframe readings are undetermined, the daily readings suggest that the increase will continue toward a new yearly high.
Bitcoin Cash Bounces Before Range Low
A look at the weekly analysis of BCH’s price movement shows that in January, the price broke free from a long-standing descending resistance line that had been in place for 623 days. However, BCH struggled to maintain its upward momentum following this breakout.
It wasn’t until June that it experienced a significant surge, reaching a new yearly high of $329. Unfortunately, the price has since declined, confirming the $300 level as the main resistance (red icon).
If this downward trend continues, the nearest level of support can be found at $150, representing a 25% decrease from the current price. Conversely, to return to the $300 range, BCH would need to increase by 50%.
Examining the weekly Relative Strength Index (RSI) provides an uncertain signal. The RSI is a tool used by traders to assess whether a market is in a state of excessive buying (overbought) or selling (oversold) and to make decisions about buying or selling assets.
Typically, RSI readings above 50 and an upward trend indicate bullish sentiment, while readings below 50 suggest the opposite. The RSI is currently declining but remains above the 50 mark, resulting in mixed signals and uncertainty about the market trend.
BCH Price Prediction: Wave Count Suggests Bottom Is In
A closer analysis of the daily time frame provides a mostly bullish outlook. This is because of both the price action and the Elliott Wave Count.
Technical analysts utilize the Elliott Wave theory to ascertain the trend’s direction by studying recurring long-term price patterns and investor psychology.
The wave count suggests that BCH has begun its upward movement’s fifth and final wave (white). The fifth wave began after BCH bounced at the 0.618 Fib retracement support level at $180 on August 17 (green icon).
If the count is correct, the cryptocurrency’s price will reach a high between $375 – $425. The area is created by a horizontal support area, and the 1.61 Fib extension of wave four decreases (black).
This count is supported by a breakout from a descending parallel channel containing wave four movements. Therefore, the most likely future movement is an increase to the $375-$425 region, an average increase of 100% measuring from the current price.
Despite the bullish price prediction for BCH, failure to sustain the increase can lead to a 25% drop in the $150 horizontal support area. This would also invalidate the bullish count.