Technical Analysis and Market Entry: Bitcoin Cash (BCH) Provides Renewed Buying Opportunities
- The Bitcoin Cash (BCH) bulls are well supported for further moves north, with breakout nearing.
- BCH/USD price action is narrowing significantly within a daily triangular structure.
Bitcoin Cash’s price action over the last four weeks has proved to be very much choppy. Nevertheless, BCH/USD is maintaining elevated levels; all the bulls look to solidify the recovery that began in early 2019. The current price action appears to be continued consolidation, which isn’t too surprising given the sharp surge in early April and mid-May.
Back in April, following the considerable advance north, BCH/USD had to consolidate for some five weeks. It is a generally normal process to see such range-bound trading, as the market stabilizes ahead of further potential committed moves. The trend has been higher and could very well continue like that for the foreseeable future. The bulls have much in the way of supportive confluence to back further recovery.
Narrowing Triangular Structure
While the price is awaiting committed direction, it continues to move within the confinements of a triangular structure. There was a period where a breakout looked to be in the cards; however, it ended up being a fake out. The short-lived spike out from the noted pattern was seen between 29-30th May, before squeezing back within the technical triangle.
Bullish Support Confluences
As earlier noted, the bulls have plenty of proven near-term support to guide BCH/USD further higher. Firstly, the lower acting trend line of the above-detailed triangular structure, which at present is tracking around $375-$370. In the proximity is a demand zone, running from $375-$355, having provided support on several occasions since 17th May.
A failure to remain above the support areas mentioned above could be devastating for the current Bitcoin Cash recovery. The next major area of demand is not seen until back down at the $240-$210 range, where the price last traded on 30th April. Should the price fall as described, it would see BCH/USD losing a chunky 37% of its current value.
Given the outlined comfort areas for the price recovery, a buy remains attractive. The recent dip brings new buying opportunities, as BCH/USD catches support within the triangular pattern. Taking a buy position from the current area is of interest; however, further confirmation could be awaited.
A firm daily breakout and closure above the noted structure would be encouraging. Targets to the upside are $600 and then $650. Stops on this occasion should be given some breathing room below the detailed demand zone, $335.
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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