Bitcoin Cash (BCH) Price Soars: Are We in For a Correction?

Bitcoin Cash (BCH) achieved a new yearly high on June 30, continuing an impressive rally that began on June 10.

So far, BCH has experienced an astonishing 200% surge without encountering any significant setbacks. However, based on wave count analysis, there is a possibility of a temporary decline in the near future before the price resumes its upward movement.

An examination of the technical analysis on the weekly time frame reveals that BCH has been under a long-term descending resistance line since May 2021. BCH dropped to a low of $86 during this time, only slightly above the all-time low of $81 recorded in December 2018.

However, the price of BCH has seen significant growth since then. In early January 2023, it broke out from the descending resistance line that had been in place for 609 days.

Although BCH retraced to pre-breakout levels in June, it rebounded strongly after completing a bullish double-bottom pattern. The double-bottom pattern often signals significant upward movements. Since then, the BCH price has surged by approximately 200%.

BCH is trading slightly below the $285 level, and its reaction to this level will be crucial in determining future trends.

The weekly Relative Strength Index (RSI) supports the continuation of the price increase. The RSI is currently above 50 and rising, indicating a bullish trend.

Analyzing the shorter-term daily time frame also provides a positive outlook, particularly in relation to the wave count.

Looking at the long-term perspective, the wave count indicates a strong bullish trend but also predicts a short-term decrease. Analysts who utilize the Elliott Wave theory examine repetitive long-term price patterns and investor psychology to determine the trend direction.

Considering the substantial surge, the wave count suggests that the current BCH price has reached the peak of the third wave in a five-wave upward movement. The third wave is typically the most intense among the bullish waves.

So far, the length of wave three has been 3.61 times that of wave one, displaying an impressive extension level, although not unprecedented.

However, on June 30, the price reached a local peak as the RSI showed a bearish divergence. This occurs when momentum decreases while the price increases. The price has likely peaked, especially since it aligns with the 3.61 extension.

Despite this short-term bearish BCH price prediction, breaking above the yearly high at $329 would indicate that the overall trend remains bullish.

If this scenario unfolds, the rally could potentially continue toward the next resistance level at $360.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.