What to Expect in the Next 48 Hours for Bitcoin Cash

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After rebounding from the $470-support level, Bitcoin Cash appeared poised to challenge some significant price levels. A crossover between the 4-hour 20 and 50 SMAs is likely to favour the bulls by providing some additional buy signals.

A close above $550 would evict sellers and allow BCH to establish a foothold for a rally. BCH was trading at $542 at the time of writing, up 7% in the previous 24 hours.

Bitcoin Cash 4-hour Chart

To identify potential areas of reversal, the Fibonacci Retracement tool was used to trace BCH’s decline from $800 to a swing low of $471. A close above the 23.6 percent Fibonacci level would assist BCH in negotiating past some selling pressure and putting $600 in its sights. From there, an additional 6% push is possible if the 200-SMA (green) does not obstruct BCH’s progress. Overall, this represented a 17 percent increase over BCH’s press-time level.

If an immediate upward breakout at $550 is denied, expect a retest of the $520-support. The convergence of the 20 and 50 SMAs may also act as a buffer against any countermeasures taken by sellers. A triple bottom would inject life back into the market in case BCH revisits the $470-mark.

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Reasoning

The RSI’s overbought state did present some short-term challenges. However, as long as the index remains above 60, an advance above this upper zone can be expected. Similarly, the MACD must avoid a bearish crossover in order to maintain market upward pressure.

As long as the +DI remained above the -DI, any fears of an impending reversal were alleviated.

Conclusion 

Before attempting a northbound breakout, BCH is expected to ease slightly below the 23.6 percent Fibonacci level. This would give the RSI time to settle before the next upcycle.

Bulls can take advantage of this advantage by pushing above $600. The 50 percent Fibonacci level can be challenged using the same logic.

 

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