Bitcoin Cash busted through the bottom of its range visible on the 4-hour time frame, indicating that further declines are likely. The range spans support around $425 and resistance at $625, so the resulting slide could be $200 tall.
The moving averages are still oscillating to reflect sideways price action and have yet to catch up to the move. A bearish crossover could add to the downside momentum, taking Bitcoin Cash to the $225 area next.
However, RSI is already indicating oversold conditions or that sellers are already feeling exhausted at this point. Turning higher could signal a return in bullish momentum and a possible bounce to retest the broken range bottom. Stochastic is also in the oversold territory and might be ready to head north again, so Bitcoin Cash could follow suit.
Bitcoin Cash has officially had its hard fork and now the community is watching the “mining wars” unfold. Reports are showing that Bitcoin SV is in the lead with the network’s mining power but trading volumes suggest that Bitcoin ABC is preferred by investors.
All this uncertainty has led more traders to liquidate their holdings, even among other digital assets. After all, these issues could also pop up sooner or later for other altcoins, resulting to even more conflict and uncertainty in the industry.
Still, some believe that once this issue is squared out, Bitcoin Cash or any of its versions could emerge stronger and regain plenty of lost ground. This remains to be seen, though, as analysts also point out that the latest declines could take months to recover.
A bit of risk aversion in general financial markets is also keeping a lid on cryptocurrency gains as traders might prefer safe-haven holdings like gold and the US dollar for the time being.