A week over week 20 percent drop of Bitcoin Cash (BCH) prices was enough to set the tone for week. From the chart, it’s obvious that the trend is bearish with prices trading within a bear break out strategy set in motion in early August. Going forward, we suggest selling on every high until after a firm bullish reversal pattern prints.
From the News
There are four main elements of a “proper” cryptocurrency. They include the ability to fix supply, transaction immutability, censorship resistance and though an external factor, the cost of production. As an individual, the cost of production plays a major role and can directly affect the overall decision of whether to embark on the mining business or not. It all depends on the margin after costs but speaking at the CoinsBank Blockchain Cruise Charlie Lee said Bitcoin Cash miners would have no reason to mine BCH should Bitcoin decide to launch what he calls a miner attack.
Even if Bitcoin miners don’t have to “waste” time on launching such an attack, it will only take 20 days for Bitcoin Cash to be wiped out of existence. Supporting his claim, he said Bitcoin and Bitcoin Cash miners use the same equipment but with a low hash rate in the BCH network, Bitcoin Cash is literally susceptible. Currently, Bitcoin Cash network hash rate stands at around 3.6 EH/s—which is seven percent that of Bitcoin–and a difficulty level of 565G.
In other news, Post Oak Motor Cars owned by Tilman Fertitta now accepts payment in Bitcoin Cash and Bitcoin for customers purchasing Bugatti, Bentley and Rolls-Royce. In a press release, the dealership said they will be partnering with payment processor, BitPay.
Bitcoin Cash (BCH) Technical Analysis
A 20 percent drop in the last week re-asserted the overall price trajectory. Visibly, not only are BCH sellers stepping on gas but are confirming last week’s bears and week ending Aug 12 bear break out pattern. Since prices did reverse from $600 main resistance trend line and former support line canceling the three bar bullish reversal pattern of week ending Sep 17, bears are clearly in charge and as such we suggest selling on pull backs in lower time frames. This therefore means our previous BCH price forecasts are solid and with every lower low, our first bear target at $300 is getting closer.
If anything, what we have is a nice bear break out pattern with price action trading at the third stage, the trend resumption phase. Notice that after that strong rejection of higher highs on Sep 5, the decline has been steady to say the least. On the charts, we have these series of lower lows meaning the best way to sync with the trend is to liquidate BCH on every high with targets at $300. However, with yesterday closing as a pin bar, we might see temporary pull back but still we recommend shorting anywhere between $450 and $480 in the 4HR chart. Any close above $500 and traders can exit their shorts.
Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.