Bitcoin Cash (BCH) has broken through a critical resistance level at and above $300, after trending down with most of the crypto markets since July, and after accumulating at the bottom of that downtrend. After a week or so of a local uptrend, it now looks to be setting a new direction for 2020.
Starting on the 3-day BCH/BTC chart, we see what now looks like a turnaround. Volume, which had been in decline and then flat for a while in a likely accumulation, is rapidly building with price rise.
Two tests of the ₿0.02558 level had translated into a double bottom. Currently, BCH has shattered the important ₿0.033 zone, and there is only modest resistance above this level. We should be on the lookout here for a correction from this breakout, and perhaps a retesting of the breakout area – but given the considerable strength of the uptrend, we might not even get that.
Likewise, on the daily USD pairing, things are looking very promising as Bitcoin Cash is eating away at the main regional inflection zone surrounding roughly $320. We might expect this level to not break just yet, and for the altcoin to take a breather and allow some profit-taking and a retest around $300.
The RSI is now just about overbought, and pointing straight up. We also see a histogram profile accelerating in a bullish expansion, which would make an impressive close for the day if it holds there.
Finally, if we come down a bit to the 12-hour USD pairing, we see that a strong image of a breakout is only getting stronger. The volume profile has been shattered, as has the histogram profile. Every price high on this chart has seen a higher or equal RSI level, which implies that strength is not flagging.
RSI, however, is spending a lot of time in overbought conditions. Now that $330 has been breached, we could see a correction come in soon.
Ultimately, Bitcoin Cash is looking really strong on the long term charts. We should observe the characteristics of a retrace, which is likely to come soon, to gauge sustained strength behind a new uptrend. A high timeframe reversal now seems likely.
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