Bitcoin Cash traders must watch out for these key levels

Bitcoin Cash traders must watch out for these key levels

Bitcoin Cash presented a symmetrical triangle on its chart and awaited a massive breakout. However, the alt maintained a neutral bias as per its RSI and MACD, so a swing was possible in either direction. At the time of writing, BCH traded at $594, up by 1.4% over the last 24 hours.

Bitcoin Cash 4-hour Chart

A series of lower highs and higher lows post 26 October gave rise to a symmetrical triangle setup on BCH’s 4-hour timeframe. Based on the height of the triangle, BCH eyed a 15% breakout in either direction of the triangle. However, it’s worth noting that bears had a slight edge since the candles traded beneath their 4-hour 20 (red), 50 (yellow) and 200 (green) Simple Moving Average lines.

Should BCH weaken below $580, the price would be exposed to a drawdown to its 21 September swing low of $496. However, an early pushback can be offered at 21 October’s low of $533.

On the other hand, BCH eyed a favorable outcome in case bulls can slice above the confluence of its 4-hour SMA’s and the 23.6% Fibonacci level. Such an outcome would put BCH on a course towards the 78.6% Fibonacci level around $700.

Reasoning

Meanwhile, the RSI, MACD and DMI flashed neutral readings and presented little insight into BCH’s trajectory. Should the RSI declines below 45 followed by bearish crossovers along with the DMI and MACD, BCH would be exposed to a breakdown. Similarly, an upwards swing would be forthcoming, should the MACD and RSI capture ground above their respective half-lines.

Conclusion

Since the direction of BCH’s breakout was unclear, traders must keep a close eye on key levels. A move above the 23.6% Fibonacci level can trigger a favorable outcome, while a close below $580 could lead to a dangerous sell-off.

Source

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