The chart of Bitcoin Cash has recently broken out of the downtrend line that formed since the beginning of last September. The daily chart (fig. 1) shows us three green candles that drove the price from around $430 USD to $570 USD. Before that Bitcoin Cash came very close to the $420 USD level of which many analysts said that breaking this resistance would be a significant bearish market sign for the BCH chain of Bitcoin. In fact, the BTC chain followed BCH’s movement. However, not as significantly as of now. For now the Relative Strength Index indicates us, of course, that Bitcoin Cash is overbought or close to overbought. In the 4h chart (fig. 2) as well as in the daily chart. How substantial the outbreak was will be proven during the next week.
The recent uptrend was not enough on the BTC chart to break out of the same downtrend channel that started to form last September. However, given that BTC’s uptrend started 2 – 3 days later than BCH’s the upward movement could still follow during the next days. In our last analysis, we said that:
If Bitcoin should not reach this critical level [above 6800 at this time] it is likely that the chart stagnates for now. Postponing major movement to November or even December.
Basically, the same analysis still accounts for the chart right now. We indicated that Bitcoin could have a major uptrend in the short-term. Traditionally, the months of October to December are months with strong bullish activity. However, mid-to-long-term we still remain skeptical. The bear market could continue after this uptrend in January or February.
Our last chart (fig. 3) shows us that Bitcoin has not broken out of the most recent downtrend channel (yellow) that formed in September. However, the major downtrend channel that started in March (light blue) was broken. The chart is relatively far away from the resistance zone. The RSI is also indicating that the market is far from being overbought. An outbreak on BTC seems more likely than a continuation of sidewards movement or a bearish trend.
We hope that we could help you building your strategy for the market and that you trade well!
DISCLAIMER: This is no financial advise.
