The Bitcoin Cash/US Dollar pair (BCH/USD) ignited its bull run on November 10, 2017 when it breached resistance of $870. The breakout was able to attract enough momentum to make a run to $4,104.3 on December 20. In more than a month, the market grew by over $371%! Those who bought the breakout took the chance to lock their gains.
Faced with heavy selling pressure, BCH/USD dropped to $1,567 on December 22. Bottom fishers bought the dip, but the ensuing rally showed that bulls were tapped out. The market created a lower high of $3,186 on December 23. Participants responded by either taking profits or cutting their losses. From that point, the pair posted consecutive lower highs and lower lows until recent price action.
Technical analysis reveal that Bitcoin Cash/US Dollar maybe be carving a bottom at $600 support. The high volume on March 29 and March 30 is an indication that the market has capitulated. In addition, a bullish divergence was seen on the daily chart. This suggests that a trend reversal might happen soon.
The strategy is to buy as close to $600 as possible. If bulls defend this level, they will likely create a base before moving to our target of $870. Sell immediately because for now, the market will most likely range trade. The process may take less than a month.
Daily Chart of Bitcoin Cash/US Dollar on Bitfinex
As of this writing, the Bitcoin Cash/US Dollar pair is trading at $632.30 on Bitfinex.
Summary of Strategy
Buy: As close to $600 as possible.
Disclaimer: The writer 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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