Bitcoin Cash Price Technical Analysis – Can BCH/USD Retain Momentum?

Key Points

  • Bitcoin cash price started a decent upside move and traded above the $1,200 resistance against the US Dollar.
  • There was a partial break above yesterday’s highlighted bearish trend line with resistance at $1,220 on the hourly chart of BCH/USD (data feed from SimpleFX).
  • The pair is correcting lower, but it is above the $1,200 level and the 100 hourly simple moving average.

Bitcoin cash price made a positive move above $1,200 against the US Dollar. BCH/USD must stay above 100 hourly SMA to gain further upside momentum.

Bitcoin Cash Price Support

Yesterday, we saw how there was a key support forming above the $1,100 level in bitcoin cash price against the US Dollar. The price started a slow and steady rise and it was able to move above the $1,160 resistance. There was also a break above the 61.8% Fib retracement level of the last downside wave from the $1,285 high to $1,116 low. It opened the doors for more gains and the price settled above $1,200 and the 100 hourly simple moving average.

More importantly, there was a partial break above yesterday’s highlighted bearish trend line with resistance at $1,220 on the hourly chart of BCH/USD. The pair traded as high as $1,263 and it is currently correcting lower. It has moved below the 23.6% Fib retracement level of the last wave from the $1,125 low to $1,263 high. It is currently testing the broken trend line at $1,210. On the downside, the 50% Fib retracement level of the last wave from the $1,125 low to $1,263 high is at $1,195 to act as a support. Moreover, the stated $1,195 level is also near the 100 hourly SMA.

Bitcoin Cash Price Technical Analysis BCH USD

Therefore, as long as the price is above $1,190 and the 100 hourly SMA, it could rise once again.

Looking at the technical indicators:

Hourly MACD – The MACD for BCH/USD is now back in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BCH/USD is moving lower towards the 50 level.

Major Support Level – $1,190

Major Resistance Level – $1,250


Charts courtesy – SimpleFX

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Bitcoin Price Key Highlights

  • Bitcoin price could be in for a longer-term climb as it looks ready to form another inverse head and shoulders pattern.
  • Recall that bitcoin price staged a decent rally after forming a smaller inverse head and shoulders on its 1-hour chart.
  • Price has yet to test the neckline around $11,000 and break higher before confirming the potential climb.

Bitcoin price is in the middle of creating another inverse head and shoulders formation that could lead to more rallies.

Technical Indicators Signals

The 100 SMA is crossing above the longer-term 200 SMA on the 4-hour time frame to signal that the path of least resistance is now to the upside. This suggests that the previous downtrend is getting ready for a reversal. These moving averages are currently holding as dynamic support as well.

A break past the neckline could lead to a climb of the same height as the formation or roughly $5,000. Stochastic is on the move up to indicate that buyers have the upper hand but is also dipping into overbought territory to signal bullish exhaustion.

RSI has more room to climb, so buying pressure could stay in place for a bit longer. However, if the neckline keeps gains in check, bitcoin price could revisit the area of interest at $10,000 then at $9,000.

Market Factors

Risk appetite peeked back in the financial markets during the US session as traders appeared to be bracing for more cautious remarks from new Fed Chief Powell. If so, businesses and consumers could look forward to a longer period of low interest rates or a slower pace of tightening, which would be good for stocks and commodities.

However, what really boosted bitcoin price was the news that cross-border currency exchange company Circle acquired Poloniex, which is a leading crypto exchange platform. Poloniex has the seventh-largest market share of BTCUSD trading volume, according to CryptoCompare.

Apple co-founder Steve Wozniak told the Economic Times’ Global Business Summit that he had seven Bitcoin stolen from him through credit card fraud. The 67-year-old recounted the incident to a packed room at the event in New Delhi on Saturday 24 February.

Bitcoin’s Purity Appealed to Wozniak

Wozniak told the summit that he had originally bought Bitcoin as an experiment. He didn’t see it as an investment. He was drawn to the cryptocurrency because of the freedom from manipulation it promised:

“Bitcoins to me was a currency that was not manipulated by the governments. It is mathematical, it is pure, it can’t be altered.”

He decided to buy BTC when the price was around $700. He began to look into where he could use the currency:

“I had them so that I could someday travel and not use credit cards, wallets or cash. I could do it all on Bitcoin. I studied which hotels and facilities accepted Bitcoin… it’s still very difficult to do so. I also tried to buy things online and trade Bitcoin online.”

However, after making his initial purchase, he determined that he was spending far too much time looking at the price. The impulse to constantly check his gains stressed him and he determined he would cut his experiment short by selling his BTC. He arranged the sale with an unknown party online. He told the summit:

“The blockchain identifies who has bitcoins… that doesn’t mean there can’t be fraud though. I had seven bitcoins stolen from me through fraud. Somebody bought them from me online through a credit card and they cancelled the credit card payment. It was that easy! And it was from a stolen credit card number so you can never get it back.”

Wozniak’s story highlights the dangers of selling Bitcoin using certain methods. Peer-to-peer trades that involve credit cards or eWallet-like services such as PayPal and Neteller can be charged back to the original sender. They, therefore, represent a high-risk category of payment methods for the purposes of selling cryptocurrency. As such, peer-to-peer trades are much safer when handled with cash or direct bank transfer.

However, cash-settled trades present their own problems. There have been numerous cases of trades being arranged in person that turned out to be hold-ups. A recent example in Taiwan involved the robbery of over US$170,000 worth of BTC. A gang had arranged an online trade with the victim. The two parties met and the seller was assaulted and forced to transfer Bitcoin from his phone to a wallet under the attackers’ control.

Generally speaking, it’s much safer to make a sale of cryptocurrency using an established and trusted service than it is to arrange a trade through a peer-to-peer platform. Despite services like LocalBitcoins offering an escrow function when making a sale, a credit card or eWallet payment can be charged back after the Bitcoin is released from the escrow. Since the buyer is probably using a fraudulent card or account, it’s then impossible to get either the Bitcoin or fiat money owed back.

The Israeli Supreme Court reached a decision today in support of local cryptocurrency exchange Bits of Gold. The temporary court order was issued by the Court to one of Israel’s largest financial institutions, Leumi Bank. Generally speaking, the decision means banks are required to permit cryptocurrency trading, and are prohibiting from limiting the bank accounts of companies associated with the industry.

Bits of Gold

Late last year it was reported that Bank Leumi had stopped all of Bits of Gold’s transactions, both incoming and outgoing. According to court documents, the bank – the second largest in Israel – made a decision to stop servicing the Tel Aviv-based financial institution for its Bitcoin-related activity. The bank told the court that the problem was that it was unable to follow its AML (anti-money laundering) requirements due to the inherent nature of cryptocurrencies.

The Leumi Bank decision was heavily scrutinized by crypto enthusiasts: In December, when the bank decided to block payments to cryptocurrency exchanges, Bitcoin was in very high demand, which was accompanied by record prices for the cryptocurrency.

At the time, the bank had claimed that the decision was in line with an order issued by the Bank of Israel. However, it appears that the order was actually part of regulatory confinements put in place for the online gambling industry: The problem is that Bank Leumi classified various Bitcoin exchanges as gambling sites, thereby permitting it to block payments.

According to Globes, Yuval Roash, CEO of Bits of Gold, issued a statement in response to the Supreme Court’s decision: “The court’s decision enables us to continue to focus on the base of the crypto community in Israel. We were the first to request the creation of rules for the activity of digital currencies and the first to stand by those rules. We will continue to lead the industry, in order to give digital currencies their rightful place in the Israeli economy, as an incredible growth engine for the high tech and financial industries.”

Looking Ahead

The ruling today by the Israeli Supreme Court overrides the bank’s decision — making it a huge victory for the cryptocurrency community, which is seeing more and more instances of government attempts at regulation, and even some all-out bans of cryptocurrencies or related technologies like initial coin offerings (ICOs) and binary options.   

The problem is that it’s not a sweeping victory: While the Supreme Court’s decision does prohibit Leumi Bank from blocking transactions or activity in relation to the Bits of Gold company bank accounts, the bank (and others) may be able to circumvent the ruling by applying restrictions on the accounts of individuals attempting to make transactions through the company.

In closing, it’s worth remembering, too, that the situation is fluid. With the court order being temporary, it is theoretically possible that in time, with further information and evidence, the order could be reversed.