Key Takeaways:
- Bitcoin cash token corrected 4% since the Aug. 29 rally.
- Technicals predict a near-30% rally.
- BCH remains dependent on Bitcoin, so the path forward for Bitcoin cash bulls is unclear.
YEREVAN (CoinChapter.com) — Bitcoin Cash (BCH) dropped 4% since the start of the Asian-Pacific session on Aug. 30, trading at $217. Notably, the downward correction came after a 20% rally on Aug. 29, briefly peaking at $228 in the European session.
BCH bulls ready for a breakout
Meanwhile, the coin could be gearing for a breakout. The BCH/USD price action charted within a pattern dubbed the “falling wedge” since the local peak on June 30. The setup entails two falling trendlines that connect the swing highs and lows, incrementally lowering the asset value.
However, the falling wedge is a bullish reversal pattern that promises a breakout once BCH can breach the resistance line. If a confirmation follows, the expected rally could equal the maximal formation height, pinning the target price for Bitcoin Cash at $277, or 27% higher than the current value.
As of Aug. 30, the BCH coin has not confirmed the pattern. Conversely, it retested the upper trendline, suggesting a further correction in the coming sessions. However, if Bitcoin Cash bulls gear up for another leg up, an over 25% move might be in the books.
A pseudonymous crypto analyst @cryptokaleo ‘longed’ the BCH/USD pair before the correction but insisted on bullish prospects for the BCH/BTC pair.
What’s behind Bitcoin Cash fluctuations?
Bitcoin Cash followed BTC’s price action month-to-date, which could explain the jump and the subsequent correction in the previous two days.
The flagship crypto’s rebound move came amid the Grayscale vs. SEC buzz, as the largest Bitcoin fund won the lawsuit against the US Securities and Exchange Commission concerning a rejected Bitcoin spot ETF.
The elation, however, didn’t last long, as the victory did not yet mean a simplified path towards a spot ETF approval. Thus, a correction followed shortly, and many major altcoins copied both moves, including Bitcoin Cash.
Notably, the BCH trading volumes increased by over 260% in 24 hours, which could mean some of that volume is sponsored by the bears taking a profit. A further correction could be expected if the volume doesn’t diminish in the coming session.
