april-outlook-for-bitcoin-cash-bch

April Outlook For Bitcoin Cash BCH

As predicted in our last analysis for on Bitcoin Cash (BCH-USD) in February, the coin took the massive leap price leap it was poised to. This saw Bitcoin Cash shoot up over 100% on USD trading, and over 50% on Bitcoin (BTC-USD) pairs. Bitcoin Cash now finds itself testing the resistance that formed after prices dropped in the midst of the turmoil of the split of last year. What does the 2nd quarter hold for Bitcoin Cash?

Fundamental Outlook

Bitcoin Cash has seen its price double in just 48 hours, on the back of the strong bullish moves seen in prices of Bitcoin, which is actually the parent coin of BCH. BCH and BTC tend to have a strong correlation. Moreover, BCH is starting to see large scale adoption, with AMBCrypto reporting that more physical shops in Japan are accepting Bitcoin Cash over Bitcoin.

Adoption is key for a cryptocurrency and Bitcoin Cash has continued to push its quicker, more cost effective structure over Bitcoin. Strong communities are forming around Bitcoin Cash as believers think it's the coin with the best chance at mass market appeal and use.

Technical Outlook

The long-term outlook seen on the BCH/USD weekly chart shows an asset on the path to price recovery, with decent buying volume which is gradually increasing. The previous support at $395.73 which was broken by the massive selloff following the BCH split of 2018 is now in view. The 9EMA is now firmly supporting the price candles and this is adding to the bullish bias seen on BCH. The surge in Bitcoin prices beyond the $4200 resistance has helped to pull along BCH, which is itself a fork of BTC. As long as buying pressure continues to dominate BTC prices, we expect same to continue with BCH.

BCH/USD Weekly Chart: April 3, 2019

The daily chart presents the medium-term picture for this asset and we can see price currently testing the $268 price resistance. This was the price to which BCH gapped down to following the chain split, and it is expected that price will test this area as it continues its upward march. The previous support of $130 is also seen on the chart: this was the area that BCH/USD used to launch its present upward push.

BCH/USD Daily Chart: April 3, 2019

This chart also shows that buying pressure in the medium term is stronger than it has been in a very long while. The 9EMA continues to play a role here as the dynamic support.

With all this in mind, how is BCH/USD expected to perform in the next few weeks?

Trade Scenario

Buying pressure on BCH/USD is very strong at the moment and does not look like it will abate soon. Prices have been so depressed for long that we expect buyers to key in to the upsurge for some days to come. The $395.73 price area is expected to provide resistance to the upsurge in a role reversal function.

In the medium term, it is possible that price may pull back from the $268 minor resistance down to the $200 minor support/psychological support area. However, this may provide another re-entry level for buyers who want to get in on the current action at cheaper prices.

Beyond the resistance level seen at $395.73, further resistance is seen close to the $580 mark. However, price action has to continue displaying strength on the back of continued demand, with good buying volumes, for such levels to be attained.

Possible Price Moves

So here is what we have going on:

  1. Price is testing the $267.99 resistance on the daily chart. This is close to $268, which is a psychologically important figure (a round number). This is also the price area where prices gapped down to following the chain split of 2018.
  2. Buying volumes are very strong on the daily and weekly charts, showing high demand.

We could therefore see the $267.99 minor resistance breached, and a move to test the $395.73 resistance.

Market Sentiment:

The long term, mid-term and short term outlook of the BCH/USD pair is:

  • Long Term – bullish
  • Mid-term – neutral to bullish

Please note: Analysis for BCH/USD was done using weekly and daily charts, where price candles/bars capture price action over a much longer period. Therefore, it is possible that the price moves mentioned above may take some time to play out.

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Disclosure: I am/we are long BCH-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.