Bitcoin Cash Market Analysis: 01 January 2021

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Bitcoin Cash was better off than other altcoins on the exchange, with BCH still in the top-10 on CoinMarketCap indexes. Though slow returns were just 42% in 2020, BCH did not see any crazy price drops except in March.

With much of the thriving community, we should expect Bitcoin Cash to begin its gradual but steady growth in the future.

Bitcoin Cash 1-week chart

Source: BCHUSD on TradingView

The 1-week chart for BCH showed Bitcoin Cash still in the rounded-bottom pattern, one extending all the way from June 2019 to press time. However, like most markets, be it Bitcoin, Ethereum, or any other crypto, Bitcoin Cash also seemed overbought. This seemed to entail that a retracement was well overdue on BCH’s price charts.

The said short-term retracement was the only factor holding back Bitcoin Cash from surging higher. In this short-term retracement, we can expect Bitcoin Cash to head to its intermediate support at $309 or retrace fully towards the rounded bottom pattern. Either way, we can expect a drop ranging between 10-20%.

Apart from this retracement, Bitcoin Cash still looked good enough to long. The RSI indicator on the weekly chart was near the overbought zone, but it hadn’t tapped or breached it.

The OBV indicator highlighted indecisiveness, indicating the short-term retracement to come. Perhaps, sooner than anticipated.

The Stochastic RSI [adjusted] showed that there was a chance for BCH to surge, however, the Stochastic RSI signaled overbought and multiple attempts at bearish crossovers.

Conclusion

If one chooses to take BCH too long, the entry/exit locations will be as seen in the map above. Waiting here, though, will be the best thing to do since we can expect BCH to decline, a move that would coincide with an overall market drop, even Bitcoin’s. Longing after the retracement will produce greater returns and be much smoother than it is now.

Disclaimer: The findings of the following article are the sole opinions of the writer and should not be taken as investment advice

 

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