Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.
bitcoin money [BCH] has been under heavy selling for the past six weeks after an ascending (yellow) channel broke down on April 30. Since then, the price has mostly been hovering near the lower Bollinger Bands (BB) band.
A convincing close below the two-month trendline support (yellow, dotted) would open the doors for an extended retracement. Any close below the $148 area would delay the chances of a near-term bullish recovery. At press time, BCH was trading at $151.9, down 7.75% in the past 24 hours.
BCH daily chart
Given the aggregated sense of fear, it was relatively easy for BCH sellers to find new resting grounds. A reversal from the $362 area in April drew two-month trendline support on the daily time frame.
Since then, the coin has been on a steady decline. The broader sell-offs took BCH to its lowest level in 27 months at the time of writing.
With the lower and upper bands of BB looking opposite, the bears would now be looking to push for a phase of high volatility in the coming days. As trading volumes were in a declining phase, the trend had not yet taken a convincing shape.
Any close below the 148 support would drag BCH down further towards the $136 level. After that, bulls would likely aim to counter selling pressure for its multi-year lows. A short-term bullish rally would likely be short-lived by the southerly trending BB baseline.
Over the past three days, the bearish RSI has broken through the resistance at 38 to dip into the oversold region. A potential bounce could delay any further correction on the chart.
With the MACD lines entering a bearish crossover after nearly three weeks, the selling pressure has seen a resurgence. Buyers still had to close the gap between the MACD lines and zero to claim an edge.
The altcoin was exhibiting a one-sided bearish pattern. A robust break below the two-month trendline support would pair well with the bearish narrative. A close below the $148 mark would reaffirm a short sell signal.
But with oversold readings on the RSI, buyers could attack by countering short-term selling pressure.
Additionally, BCH shares a 47% 30-day correlation with the king coin. Thus, monitoring the movement of Bitcoin would be essential to make an accurate decision.