Earlier in the week, Bitcoin ended up losing over 5 percent of its trading value in around an hour’s time. In line with the crypto-market’s long-standing tradition, this price drop went on to affect the rest of the altcoins too, with BCH being one of them. Bitcoin Cash’s price action had looked promising all throughout the previous month, however, after the price fall on 3 September, it found itself at a price level it last occupied in the month of July.
At the time of writing, Bitcoin Cash was being traded at $233 with a market cap of $4.3 billion. Over the past 24-hours, BCH’s price did make up some of its losses thanks to a 4 percent hike on the charts, while registering a 24-hour trading volume of $2 billion.
Bitcoin Cash 1-day Chart
Source: BCH/USD, TradingView
Bitcoin Cash’s price action was confined to a descending channel formation all throughout the month of August. While the expected breakout was north, the crypto seemed to have been swayed by Bitcoin’s price action over the past few days, while noting a downward breakout. At press time, the support at $222 seemed to have stabilized the coin’s freefall, with the level now helping the cryptocurrency’s price move upwards.
If the recovery were to continue, there are two strong points of resistance that Bitcoin Cash will have to get past in order to recover all of its losses. The resistance levels for the coin remained at $245 and $260.
Source: BCH/USD, TradingView
Alas, the indicators for Bitcoin Cash didn’t look very promising, at the time of writing. The MACD line, after having undergone a bearish crossover, wasn’t show ing any signs of a reversal. Further, the RSI was making its way back to the neutral zone after having spent some time in the oversold zone.
Source: CoinMetrics
As expected and evident from the past week’s price action, Bitcoin Cash’s correlation with Bitcoin continues to remain strong. In the past year, the same has in fact risen from 0.73 to 0.84, according to CoinMetrics’ data.
Conclusion
Bitcoin Cash’s price action witnessed a breakout over the past two days as a result of its correlation with Bitcoin, the world’s largest cryptocurrency. This led to the price mirroring the movements of Bitcoin. However, for the coming week, BCH looked well suited to try and breach the first resistance at $245. However, if the coin were to see yet another drop, the press time support level looked like it can yet again lend a helping hand and stabilize BCH’s fall.
