Bitcoin Cash made a sharp downside break from its symmetrical triangle consolidation pattern, indicating that a slide of the same height is in the works. This pattern spans $140 to $185, so there may still be some room to head south.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is likely to gain traction. After all, the gap between the moving averages is widening to signal accelerating selling momentum.
However, RSI is already starting to pull up from the oversold region to signal a return in bullish pressure. Stochastic was also in the oversold zone for quite some time to reflect exhaustion among sellers and a possible pickup in buying momentum. In that case, a pullback to nearby resistance levels may be in the works.
Cryptocurrencies are deep in the red over the past 24 hours, with Bitcoin Cash being among the biggest losers. Bitcoin Cash is down 18.94% at $356,666,005 in volumes. Still, the drop happened mostly across the board and is being pinned on a general downturn in sentiment.
This likely spurred from the fact that coins have struggled to break above nearby resistance levels over the past few days, even after several bullish attempts. This confirms that traders are still being cautious and quick to book profits, also being quick to react to declines.
Still, a number of analysts maintain that the selloff is just part of a short-term correction. After all, prices have yet to test and break below the previous year lows, so there’s still some weight to the narrative that the industry is bottoming out.
For now, traders might hold out for any major developments that could stem the declines. The lack of any positive catalysts for a prolonged period, however, could accelerate the slide.
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