The price of BCH has experienced a remarkable surge of 170%, accompanied by minimal pullbacks. Moreover, recent short-term indicators indicate that the correction phase may have come to a close.
Bitcoin Cash (BCH) Price Witnesses Minor Decline
Since May 2021, BCH’s price has been following a downward resistance line, as indicated by the weekly chart’s technical analysis. Throughout this period, the lowest point BCH reached was $86, slightly above its all-time low of $81 recorded in December 2018.
However, there has been 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.
Although there was a brief retracement to pre-breakout levels in June, BCH experienced a strong rebound after forming a bullish double bottom pattern (green icons). This pattern often leads to substantial upward movements. Consequently, the price of BCH has surged by approximately 170% since the formation of the double bottom.
Currently, BCH is trading just below the $285 mark, and how the market responds to this level will be crucial in determining its future trend. The rejection and subsequent decrease from this area coincided with miners withdrawing $263 billion.
The continuous price surge receives additional support from the weekly RSI, a momentum indicator utilized by traders to evaluate market conditions and make trading decisions.
When the RSI reading exceeds 50 and shows an upward trend, it suggests that the bulls have the upper hand, indicating a possible bullish trend. Currently, the RSI is above 50 and steadily rising, both of which are favorable indications of a bullish trend.
Furthermore, the entire upward movement was preceded by a bullish divergence (green line). This is another encouraging sign often associated with bullish trend reversals, further bolstering the credibility of the ongoing price increase.
BCH Price Prediction
After analyzing the daily time frame, the outlook for BCH appears optimistic based on wave count analysis.
In the long term, the wave count indicates a strong bullish trend. Analysts employing the Elliott Wave theory examine historical price patterns and investor psychology to determine the likely direction of the trend.
Considering the notable surge, the wave count suggests that the current BCH price has initiated a five-wave upward movement (white). Among these waves, the third wave has experienced an extension, which is a common occurrence in a five-wave increase.
On July 18, the price experienced a rebound from the 0.382 Fibonacci retracement support level (black). The Fibonacci retracement levels principle suggests that after a substantial price movement in one direction, the price will partially retrace to a previous level before continuing in its original direction. The 0.382 level is often where wave four concludes.
If the wave count is accurate, it is expected that the BCH price will reach the completion of wave five within the $380-$390 range. This range is determined by the 4.21 extension of wave one (white) and the 1.61 external retracement of wave four (red). It signifies a potential target for the ongoing bullish movement within that specified price range.
Based on the current price, achieving this target would result in an approximate 50% increase.
However, if the BCH price falls below $233, it would indicate that the price is still undergoing a correction within wave four. In such a scenario, a drop to $200 would be expected before experiencing a rebound and reaching a new yearly high.