Bitcoin Cash Approaches $ 415 Again, Presenting Possible Purchase Opportunity

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The 25th largest cryptocurrency by market cap has been trading in a range for almost six months now. Bitcoin Cash was at a low again. Also in 2020, Bitcoin Cash has fluctuated for months between $ 200 and $ 280.

By the end of the year, it had climbed to $ 1,600. There was no promise that BCH could repeat the feat at the end of that fork. However, the fact remains that the longer the price brackets (accumulate), the stronger the breakout can be.

BCH – 1 day

Source: BCH / USDT on TradingView

After its parabolic run in May, Bitcoin Cash fell rapidly and established a range between $ 420 and $ 735. BCH has stayed in this range for the most part, over the past seven months. There were daily close of candles above and below the range, but the price quickly reversed.

This rapid reversal trait at distance extremes was noticeable. It was also a trait that was notably absent in December. This long-term support at $ 420 could be one of the reasons to buy BCH if it drops a few more percentage points.

Buying significant support levels after weeks of downtrend could be a way for a DCA investor to be in a long position. One thing to be wary of with BCH is that it has tested the $ 420 area several times over the past month, weakening the strength of offers with each test of the support level.

However, the most relevant question here is: Would the market really be kind enough to allow a one month delay to take a long position in BCH?

Reasoning

Source: BCH / USDT on TradingView

The OBV agreed with the price action and showed that both buyers and sellers have experienced periods of dominance and periods of weakness. Both sides of the market have not been able to convincingly gain the upper hand and force BCH out of the range in either direction.

The directional movement index showed that a strong bearish trend is underway, which is to be expected as BCH has steadily declined from the $ 700 area it was trading at in mid-November. The MACD was also below the zero line to show bearish momentum.

Conclusion

“Buy blood” is generally a good principle to follow in crypto markets. Blood was not yet flowing in the streets, which meant that the market was not yet overly fearful. A short position at a historical support level is also not a good R: R trade. Therefore, if Bitcoin sees massive sales in the next few days, BCH buy bids can be set in the $ 350 area to generate a quick profit on a dead cat bounce.


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