BCH analysisTake a close look at the daily data price charts, a W bottom pattern has formed. Not only does it follow a major downtrend but a spike in volume occurs during the price movements.
This is an important bullish reversal pattern as it shows after a continuous falling market. BCH market has stabilized at a certain range since 22th Jan, so the buyers drove the rebound. But after rebounding to the neckline, the price fell back to the previous low due to the pressure of profit-making participants. Now It rebounded and broke through the high of the last rebound, which the neckline (or neckline+5%) would be an ideal entry price. Theoretically, the expected reversal height would be the vertical height between the bottom low and the neckline.
We also need to notice that W pattern is not necessarily a reversal signal, but sometimes a consolidation pattern. These two lows appear very close, which might lose some credibility and the price might continue to move in the original direction.
