Bitcoin Cash was launched way back in 2017, as a result using the method of hard working in the pre-existing blockchain of Bitcoin. Intending to create a faster and more scalable cryptocurrency, the developers of the Bitcoin community decided to make a change in the existing protocol of blockchain.
Fearing about the long-term feasibility of Bitcoin conceived the idea of Bitcoin Cash. The decreasing TPS accompanied by rapidly climbing transaction fees affected the scalability of Bitcoins. As a result, Hard Fork was initiated by making changes in the network protocol that ultimately split the existing coins in half, creating a brand new alternative coin, the Bitcoin Cash.
The split was majorly focused on increasing the blockchain size of pre-existing Bitcoin from 1 MB to 8 MB. The vision was to create a sound global currency with faster transaction speed and smaller fees. Bitcoin Cash offers more privacy with a high transaction capability.
Bitcoin Cash Technical Analysis
So far, 2021, has been a good start for Bitcoin Cash as the price range almost hiked up to 80% from the lows of $300 December to an all-time high of $1600 it scaled in mid-may. Amid the price correction and profit booking scenario, the price has again fallen to previous support levels of close to the 200 Day Moving Average.
The price of Bitcoin Cash has previously shown consolidation in the range of $450 to $600. But this consolidation has remained upwards of $600 for now. For the next breakout to happen, the price needs to retest the first major resistance working close to $800.
Since this steep decline and current consolidation zone there are two major supports and resistances active on the charts. The first major support is available at $600, while the second major support is moving upwards because of the move of the 200 DMA curve. On the other hand, the first major resistance for Bitcoin Cash is stable at $800. Although the rising 200 DMA and intersection of previous support lines indicate a positive up move in this counter. Remember, the 200 Day Moving Average price will push the prices up by acting as strong support for this crypto asset.
Traders or Investors searching for the opportunity to take long positions on this asset are advised to be cautious and wait until it gives a breakout from this consolidation zone. Crossing the first major resistance of $800 in daily charts will give a clear indication of further price action. $800 is currently also being seen as a psychological level for inciting a new buying spree and bullish sentiment in this counter.
People who are willing to take short positions should wait for Bitcoin Cash to break the 200 Day Moving Average price. Breaking this curve would show a subsequent weakness in the coin, making it easier for making short positions in this cryptocurrency token for Bearish traders.
For daily traders, the price action is under a tight consolidation indicating a tough fight between buyers and sellers. The current value of $688 is quite close to both the resistance at $800 and support at $511. For there to be a significant move the value needs to break either of the lines with a strong volume.
The MACD indicator seems to give a golden crossover. Since most of the action is occurring in the positive axis, it is a clear indication of upward movement. Traders should wait for retesting of the first resistance level within a short span. Following the 200 DMA on daily charts will add confidence in buying above $576 for a good return in short trades.