Bitcoin Cash (BCHUSD) Technical Analysis: Resistance Turned Support Holding

Bitcoin Cash recently busted through the area of interest around $550, which also happens to be the neckline of a double bottom reversal pattern. Price is pulling back to this area as it bounced off a nearby resistance at $650.

Applying the Fib tool on the latest swing low and high shows that the 38.2% level lines up with this resistance turned support zone. If it holds as support, Bitcoin Cash could zoom back up to the swing high and beyond.

The 100 SMA is just crossing above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, there’s a chance for the uptrend to gain traction from here.

Stochastic is still pointing down, though, so there may be some selling pressure left in play. This could lead to a deeper pullback to the 50% or 61.8% levels, with the dynamic support at the moving averages serving as the line in the sand for a correction.

RSI has more room to head lower before hitting the oversold region as it is just halfway done on its move south. This signals that sellers could stay in control for a bit longer.

Bitcoin Cash has drawn support from updates that a number of exchanges are already making preparations for the hard fork on November 15. There has been a lot of controversy on this split as the community still hasn’t reached a consensus on which version to support.

However, a pre-fork conducted by Poloniex signaled that Bitcoin ABC might be the preferred version, easing some of the uncertainty ahead of the network upgrade. Still, be on the lookout for profit-taking action leading up to and during the actual fork as traders might seek to cash in quickly or jump out if any complications arise.

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