Bitcoin Cash [BCH]: Is there a potential shorting opportunity on the cards

Disclaimer: The findings of the following analysis are the author’s sole opinions and should not be construed as investment advice.

Shortly after the reversal in early April from the $ 390 zone, Bitcoin Cash [BCH] has been on a steep journey south. The price has hovered near the lower band of Bollinger Bands (BB) for the most part since.

A convincing close below three-month trend line resistance (yellow, dashed) will prolong the ongoing attack on the chart.

Any proximity outside the baseline to BB can help the buying effort to invalidate bearish trends. At the time of press release, Bitcoin Cash was trading at $ 109.6, down 1.39% over the last 24 hours.

BCH daily chart

Source: TradingView, BCH / USDT

The bears have gotten the most out of the worsening fear mood by pulling BCH towards its fresher perennial lows. The three-month trend line resistance has visibly kept purchasing power in check.

The altcoin registered a devaluation of as much as 74.4% (from 5 April) when it fell to its lowest values ​​in December 2018 a few days ago. BCH gravitated towards the 42-month lowest level on 30 June.

With BB’s lower and upper bands wanting to converge, the altcoin could stretch into a squeezing phase in the coming days. Trading volumes also fell during the recent rise in the up channel. This reading was a weak bullish move.

Any close during the immediate resistance will pull the BCH for a further downside towards the $ 101 level. After this, the bullish revival effort is likely to face a barrier near the control point (POC, red). An immediate recovery is likely to be short-lived in the $ 120 zone.

Rationale

Source: TradingView, BCH / USDT

Over the last three days, the bearish RSI hit the 42 resistance. A sustained position below this level will help sellers put sales on the chart.

Furthermore, OBV marked lower peaks in the last week and diverged bearishly with the price action. In fact, the DMI lines had not yet implemented a bullish crossover.

Conclusion

In light of the confluence of obstacles near POC, BCH may extend its slow phase in the coming days. The goals will remain the same as above.

However, BCH shares a staggering 91% 30-day correlation with the royal coin. Therefore, it will be crucial to keep an eye on Bitcoin’s movement in order to make an accurate decision.