Hi friends! Welcome to this analysis on Bitcoin Cash! Let's jump right in! Looking at the four hour chart, we can see that BCH is approaching the top resistance of the downtrend channel (black.) The surge off of Tuesday's low, has been very impressive, as opposed many of the other top coins. However, BCH has done something very important here. It has surpassed the 50 EMA! (in orange) Additionally, we can see a strong presence of buy-side volume on the chart, and the MACD has literally gone parabolic. THIS, is the enthusiasm that the bulls need to sustain, if they want to put a bottom in this market. Regardless, there is an interesting correlation here, and it is still a bit bearish. You can see that BCH is running into overhead resistance, just as the other coins are starting to teeter from bear flags, and roll over from small head and shoulders patterns. Looking at the chart, you can see that there is also a rising dashed trendline, that BCH is running into. This is important for many reasons. Firstly, it is a actually a higher high than the last high. Second, it could easily end up being the neckline of an inverse head and shoulders pattern, should a pullback from this level ensue. I've drawn a hypothetical inverse head and shoulders pattern on the chart, to illustrate how this could occur. To add to the possibility of a bullish reversal, we can see a very powerful bullish divergence on the MACD. You can see that as BCH was making lower lows, momentum was making significantly higher lows. This is an indication of a broad shift in momentum, and can often be a precursor to an impending rally. For now, we need to watch closely, to see how price behaves at the top of the downtrend channel. If it begins to fall from here, then perhaps we can look more at the case for a developing inverse head and shoulders pattern. If a breakout to the upside occurs, the falling 200 EMA (in purple,) would be the first level of overhead resistance.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
-JD-
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
-JD-