Bitcoin Cash [BCH] is one of the only top-10 crypto assets with a bullish weekly price chart. The second most-hopeful candidate seemed to be Binance Coin [BNB], but it has been laboring under the effects of a 54% drawdown in 4 months.
On the contrary, Bitcoin Cash has traded within a range for nearly 20 months. This range reached from $272 to $640, giving swing traders plenty of opportunities.
AMBCrypto reported that long-term buyers will want to see the range highs broken and flipped to support before looking to ride the trend higher. The bulls threatened a breakout in early January, but it did not succeed, and the market-wide sell-off forced a retracement.
The network appears to be in a healthy state right now though. The rising number of transactions and heightened whale activity at press time indicated substantial liquidity movement on-chain in recent weeks.
Swing traders watch the mid-range level for the next move
Source: BCH/USDT on TradingView
Since the second week of October, BCH has wicked below the $456 mid-range support three times on the 1-week timeframe. A session close below it has not occurred yet, keeping the bullish Bitcoin Cash case alive.
The A/D indicator has trended higher since 2024 – A sign of steady buying pressure. The weekly RSI was at 47, indicative of neutral momentum.
Combined with the long-term price action, a dip to the $440-$460 zone likely represented a low-risk, high-reward buying opportunity.
Local supply zone could trigger another price drop
Source: CoinGlass
The liquidation heatmap revealed that the $550 and $610 levels were notable nearby magnetic zones.
They have a high potential of attracting prices higher before a reversal. The local supply at $550 especially has been collecting liquidity for ten days.
Source: BCH/USDT on TradingView
Finally, the 4-hour chart captured how BCH bulls were unable to pierce $540.
Therefore, a short squeeze towards $550-$560 before a price drop to $460 is a possibility traders can exploit. This setup would be invalidated if Bitcoin Cash climbs above $580.
Final Thoughts
- Bitcoin Cash has been trading within a higher timeframe range for nearly 20 months.
- The $540-supply zone overhead could be swept before a bearish reversal to the long-term demand zone at the mid-range support.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Source: https://ambcrypto.com/bitcoin-cash-analyzing-why-a-drop-below-500-might-be-good-news-for-buyers/
