Investors closely monitoring Bitcoin Cash (1) and want to prevent losses should stay away from these pivotal price levels. Despite shedding a few digits in price as of this writing, Bitcoin still displays some bullishness. BTC dropped below the $20K threshold and is currently trading at $19,998, according to Coingecko (2).
Rejection wicks at the $20.5k level provided short-term support for the bears. This problem affects even the branch of Bitcoin called Bitcoin Cash. Despite Bitcoin losing the psychological support of $20k, BCH is in a pickle. There have been recent reports on several events that might have significant ramifications for BCH. According to this data, Bitcoin Cash's transaction volume has fallen short of the daily average of 27,734 transactions (3). Lower transaction volumes are a red flag for prospective and current BCH investors. Thus, this might be a problem.
A Strong Wall For The Bulls: Bitcoin Cash
Between the July 29 surge and the trough on September 19, the value of Bitcoin Cash dropped 35.50% before rising 17.40%. But after that, the price of Bitcoin Cash stays constant. The price range for Bitcoin Cash is between $96.559 and $166.025. In addition, BCH has resistance at $125,912 and support at $112.246.Despite the upbeat CCI and Stoch RSI readings, the stated resistance level continues to be a significant barrier that BCH bulls must surmount. Despite being hopeful, the Chaikin money flow index is developing a negative slope, which shows that the selling velocity is rising.
On the other hand, the bleak forecast provided by the CMF index is more obvious for the 4-hour time frame. Since the 4-hour CMF is -0.05, sellers are taking over the BCH market. Right now, the issue is whether BCH can yet recover.
Potential Recovery or inevitable decline?
The BCH support line remains static. However, $125.912 and $138.835 are two levels of resistance that traders and investors should aim for. On August 23 and September 9, the former level was broken twice, but the bulls could not hold the break, which caused the price to fall to $112.246. Investors may take a breach of the $125.912 barrier as a psychological buy signal. On the 4-hour time frame, a little uptrend has been developing after the dip on September 13. The bulls may be able to keep up their momentum and eventually exceed the indicated resistance levels with a solid close in today's session.