Bitcoin Cash Sheds 4%. Could Lose Another 12%. Here’s Why

Bitcoin Cash opened Monday at $621 and retraced shortly after, dropping to a low of $592. Although it rebounded, it is still down by over 4%.

The latest downtrend began after the asset failed to break above the $640 resistance on Sunday.  It retraced and ended the session with no notable price. Nonetheless, the decline on Monday was an extension of the previous day’s sentiment.

BCH has since shed almost all of Friday’s gains and is grappling with notable selling pressure. On the 1-week scale, the asset is close to erasing its entire previous week’s gains.

The 1-day chart shows the altcoin had a rocky start to the previous 7-day session. The decline worsened on Tuesday, when it plunged by 3%, and slipped further the next day. However, it resumed its uptrend on Thursday, surging by almost 4%.

A similar bearish start to the week occurred two weeks ago as well. The bulls staged a rally as the session progressed. It is to conclude that the latest decline may follow the same path: a bearish start as already and a rally as the week progresses.

Aside from the previous price movements, the 4-hour chart supports the prediction that an uptrend will follow the 4% loss the asset is currently experiencing.

In this timeframe, the bollinger bands are the primary positive indicator at this time.  BCH is trading close to the lower band at the time of writing. The metric showed that the decline started after the asset broke above the bands. What would traditionally follow a drop to the lower band is a rebound.

If this trend holds in the coming days, the asset will continue the pattern of a bearish start and bullish close.

However, several negative indicators suggest Bitcoin Cash will plummet further over the next six days.

Bitcoin Cash at 4-Month High

Bitcoin Cash had a months-long bullish run that ended in September. On Sep 18, it surged to a high of $650, only to retrace amid massive profit-taking. The ensuing selloff continued into October, when it rebounded.

The 1-day chart shows that BCH continued upward amid the market’s bearish state. Recently, it attained a milestone. On Sunday, it edged close to its 4-month high but faced corrections afterward. The downtrend that followed the September attempt suggests that the altcoin may plummet further in the coming days.

Aside from previous price movements, the bollinger bands hint at further downtrend. The asset broke out of the indicator on Sunday, but trends within it at the time of writing.

BCH will continue downward as it’s yet to test the middle band. Currently trading at $595, a 3% drop to the SMA is almost inevitable. The altcoin may continue downward if the bulls fail to defend the mark. Its next target may be $565.

However, it is worth noting that a rebound around the middle band only signals a further uptrend, as the bulls maintain dominance. A closer look at the 1-day chart suggests that the upward momentum is gradually waning.

If this holds, Bitcoin may continue its downtrend until it retests the lower band. It will experience another 10% drop in the coming days, hitting $532 and possibly lower if the rebound fails at that level. 

The post Bitcoin Cash Sheds 4%. Could Lose Another 12%. Here’s Why appeared first on CoinTab News.