BCHUSD Perspective And Levels: Upswing To Key Level.

BCHUSD Update: This market has gone from the 190s back to 350 within 48 hours and is worth evaluating because it offers attractive short term trading opportunities at the newly developed support levels.

I have not updated my ETH chart because I would just be repeating myself, it has only gone slightly higher while still in a resistance zone. Meanwhile BTC and BCH have been presenting much more interesting price action. When BCH started out in the 600s, it immediately sold off and had no buyers in sight until it formed a double bottom in the 190 area and reversed just two days ago. Since it took out the swing high at 254, it now has a solid bullish reversal in place. This is all old news BUT important to recognize because this is a nice example of a bullish reversal. This is what I like to see happen at support levels in strong markets.

This market now has newly developed support levels which can offer some excellent day trading or swing trading opportunities upon a retracel. The nearest support is the 329 to 318 zone which is related to the .618 of the minor upswing off the 307 low. Since this is a small structure, this support is minor but a retest and reversal on smaller time frames make it attractive for day trading. A reversal off this level with a target in the 350s to 360s offers attractive reward to risk if using the 315 as a stop.

The next support is the 298 level which is the .382 of the recent upswing. This support is important because in order for this upswing to continue, price must stay above this level. A retrace and reversal off of this level is attractive for a swing trade because a reasonable target would be a higher high which can be well into the 400s if this momentum persists.

If this market presents a deeper retrace then the next supports to watch are the 270 level and 254 to 224 zone. 270 was an old resistance that should now act as a support especially with the 254 zone just below. The 254 to 224 zone is relative to the .618 of the recent upswing. IF price reaches these levels, then I would not expect a higher high to follow, I would expect a more conservative target like low the 300s and more of a consolidation to follow.

The key resistance level that still qualifies this market as generally bearish by my evaluation process is the 381 level. So this means at the moment if price cannot compromise this level, and retraces to the supports mentioned, then those supports have a lower chance of holding with a broad lower low still possible. This is why it is not the best time to buy and hold this market in my opinion. If price breaks 381 to the upside, that signals that the broader bearish momentum is declining and the new support levels should have a better chance of holding.

In summary this market is showing some signs of strength with the significant move off of the 190 low. In order to form reasonable expectations of this bullish momentum to continue, 381 needs to be compromised. Keep in mind it is very possible to have strong upswings in the face of a bearish trend, and often initial moves like the one can mark the beginning of a new trend. Also trading against the bigger picture (buying supports while price has not broken 381) is still a viable strategy as long as the right expectations are in place. This is why short term trading strategies like scalping and day trading have a lot of potential in markets that move like this one.

Questions and comments welcome.