TA #8: Analyzing BitcoinCash (BCH) | Bullish Breakout (22/03/2022)

By CryptoManthan | Coin Analysis | 22 Mar 2022


BitcoinCash is one of the earliest and most successful forks of Bitcoin. We have seen a basic introduction to the BitcoinCash coin in our previous technical analysis of the BitcoinCash, if you are interested to learn about it then you can head out to this article. In this article, we will look into the current scenarios of the daily chart of the BitcoinCash. There are some interesting things going on there, enjoy the article but before that do read the following note carefully.

Note: The purpose of this Technical Analysis is to show the use of indicators and understand their meanings. So before making any financial decisions do your own research. Now sit back and enjoy the analysis!!

Support & Resistance

Like always we will start our technical analysis by defining some of the important zones on the graph that we call support and resistance zones. Check out the chart below where you can see the drawn support and resistance zones.  

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Current Support Zones

Primary Support Zone: $275 - $285

This primary support is the only support we have on the daily chart of BitcoinCash. And you can see that it has been successfully tested multiple times which indicates the strength of the support zone. If you have read the previous technical analysis then you might see the same support zone was supporting the price from falling down.

Current Resistance Zones

Primary Resistance Zone: $340 - $345

As you can see in the chart above that there is long primary support at $340 which was tested a few times earlier and the price got nicely rejected from there but this time as you can see the right-most candle, which is the current daily candle has been broken out from this long-standing primary resistance zone which is a good sign for the upcoming bullish trend but not yet confirmed.

Secondary Resistance Zone: $395 - $405

If the primary support got the complete breakout and successfully tested then the next resistance zone is around ~$400. If we see a confirmed breakout and not a fakeout then the potential growth is to the $400 region where there will be the test and bulls have to prove their strength there in order to continue the growth.

If you read the previous analysis of the BitcoinCash then you might remember that these are the same support and resistance zones and back then the price was approaching the support level and fortunately the price has bounced back nicely from there.

What Indicators Are Indicating

After looking at the Support & Resistance zones on the daily timeframe chart of the BitcoinCash it's time to check for the indications from the indicators. In this section, we will see some of the popular trading indicators and see what they are indicating about BitcoinCash.

SMA 200 (Smooth Moving Average)

As we know that the Smooth Moving Average indicates the long-term trend of a particular asset. You can see the solid black line on the above chart, it is above the price of candles which means that the price is still in the downtrend, and in order to come into the long-term uptrend price has to crossover this SMA 200. 

MACD & RSI (Moving Average Convergence Divergence & Relative Strength Index)

You can see the Moving Average Convergence Divergence (MACD) in the below chart. MACD line had already crossed the signal line which indicates the bullish momentum and also if you check closely the MACD histograms are still dark green indicating the strong strength of the bullish momentum.

There is a Relative Strength Index (RSI) right below the MACD indicator. The current RSI is at ~70 which is a little concern to the bullish trend as the RSI above 55 is considered as a bullish sign but the RSI above 70 is considered as an asset moved into the overbought zone and the possibility of slow down of the growth. But since today's candle of price has a long time to go and RSI is at the border so let's wait for confirming whether the price is in the oversold zone or not.

On Balance Volume (OBV)

On Balance Volume (OBV), is one of the most underrated technical indicators which give insight about the volume on the up days and down days. We can get the idea of the strength of bulls and bears at a particular price level. You can check the OBV line has an upward slope which indicates that the volume on up days is larger than the volume on down days. From that indication, we can say that the bulls are dominating the market right now, a bullish indication!

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Conclusion

After looking at the support and resistance zones, a breakout from the primary resistance level, and the indications from the indicators we can make our conclusion on the upcoming prices movements. For now, bulls are showing the most confirming sign and are dominating the market but there is a possibility that the price will have a retest at the primary resistance zone.

Hope you like this analysis and this article. Do share your feedback about this analysis and share your opinion on BitcoinCash. Have you invested in BitcoinCash (BCH) or in some of the projects in the BitcoinCash or SmartBCH ecosystem?

Thanks for your time and appreciation!


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CryptoManthan
CryptoManthan

We write about trading indicators, strategies, crypto projects, and blockchain technology.


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