TradeCityPro | BCH: Breakout or Deeper Correction?๐ Welcome to TradeCity Pro!
In this analysis, Iโll be reviewing BCH. This coin is one of the older assets in the market, with chart data available since 2018. However, the chart Iโm analyzing today is from Binance, which provides data from 2020 onward.
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Weekly Timeframe
In the weekly timeframe, we observe an uptrend that began at a low of 97.7. The first bullish leg pushed the price to 293.9, followed by a correction down to 189.6, and then another leg up to 693.
๐ Currently, the price has tested the 693 resistance twice. At the same time, we have an ascending trendline, which was broken in the last weekly candle. The price has also formed a shadow towards the 293.9 support level.
๐ฝ If the price continues to decline and stabilizes below 293.9, we can confirm a double-top pattern. If this support breaks, the price could move down to 189.6. If the downward momentum continues, we could even see a decline to 97.7.
โจ For a short position, you can enter if 293.9 breaks, accompanied by increasing sell volume. The target for this short position would be 189.6. However, since the overall trend remains bullish, itโs important to manage risk carefully to avoid excessive losses. A break of the 41.72 RSI support could confirm bearish momentum.
๐ On the other hand, if the price stabilizes above 693, it has the potential to move up to 1414.7, which is the highest resistance in this chart and a key level. While BCHโs actual ATH occurred in 2019 and is not visible on this chart, this resistance remains crucial, and the price may react to it.
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Daily Timeframe
In the daily timeframe, we see a ranging box between 293.9 and 488.8, with the price now reaching the lower boundary.
โก๏ธ Following the breakdown of the 407.2 support, the price printed a large red candle, dropping straight to the bottom of the range. A significant support zone exists between 293.9 and 314.6.
๐ฅ The RSI oscillator is currently in the oversold zone, meaning we should wait for a structure to form before taking a position. If the price breaks below 314.6 and 293.9, it could provide a short entry opportunity.
๐ซ For a long position, patience is required until the price establishes a new structure. If that happens, entering a long position upon a breakout of the structureโs high would be a valid strategy. The next resistance levels at 407.2 and 488.8 can serve both as targets for lower triggers and as new long-entry points.
๐ผ The key supply zone is between 618.8 and 700.9โan extremely strong resistance area. If the price manages to break above this zone and hold, it could initiate the next bullish leg, with targets already identified in the weekly timeframe.
โญ๏ธ A break above 56.81 on the RSI would serve as strong confirmation for a long position. Overall market volume is currently declining, so any volume surge accompanying a breakout would help validate the position.
๐ Final Thoughts
This analysis reflects our opinions and is not financial advice.
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