Bitcoin Cash Price Analysis: BCH/USD Sees Devasting Break and Close Below Pennant Pattern
- BCH/USD has a daily close below pennant pattern, leaving room for further downside pressure.
- Eyes are on a demand zone seen tracking from $430-410 range; a failure to hold could be punishing.
Bitcoin Cash Price Overview
The Bitcoin Cash price on Tuesday was seen nursing very minor losses in the session after taking somewhat of a beating on Monday. BCH/USD had been moving within a pennant pattern, which at one point did appear bulls would capitalize on. However, the general market’s grinding lower was enough to prevent any sustained upside momentum. Over the past eight sessions, only one has managed to close ever so marginally in the green. This was on 28th October, where the price narrowed greatly, coming to the very end of the mentioned pattern. Bulls did not have enough momentum to take the price above the resistance.
Daily Chart Review
BCH/USD as a result resumed its descending tone to find sellers breaking the lower support of the pennant on Monday 29th October. This initial comforting area had been tested on numerous occasions over the past 2 weeks before it gave way. The price has now found itself below the pennant, but more importantly, it has seen a daily close below that level, which is very harmful technically. BCH/USD is now trading within a demand area, of which propped the price up last in the middle of September. It tracks from around $430 down to $410. A breach here could see a fast move south, opening the door potentially to further selling pressure.
There may be some room for a pullback, but the demand zone must hold this current selling pressure, that has kicked in. A bounce could then be seen, seeing the bulls’ gun for a retest of the broken pennant. A test underneath could likely be seen at the $440 price level. This could play out to the text book potentially, seeing a breakout, retest, then a resumption in the bearish trend.
Weekly Chart Review
Looking at a longer time frame, the weekly, it demonstrates how punishing it could be, should the above-mentioned demand area failing to hold. Historically, there aren’t many levels to really work with, given the young age of Bitcoin Cash, which does not serve well in its favor. Downside targets are seen down at $285. The last time the price traded at this level was in October 2017. Further south, the round $200 mark is the next major target. Price was last within this territory back in August 2017.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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