Bitcoin Cash (CRYPTO: BCH) attempted to break bullishly on Thursday, but like Bitcoin (CRYPTO: BTC) ran into a group of sellers, which created a long upper wick on the 21-hour candle. In contrast, Ethereum (CRYPTO: ETH)was rallying about 5% higher.
A key support and resistance level at the $636.45 has held Bitcoin Cash from erasing the gains caused by the Sept. 7 cryptocurrency flash crash, which coincided with El Salvador’s adoption of Bitcoin as legal tender. That may be set to change, however, if the crypto can break up from its bull flag pattern on the daily chart.
The Bitcoin Cash Chart: On Sept. 28 and Sept. 29, Bitcoin created a bullish double bottom pattern at the $472.55 level. The crypto reacted to the pattern and soared up about 34% higher over the following nine trading days.
The rise paired with an eight-day consolidation period has settled Bitcoin Cash into a bull flag pattern with the pole created between Sept. 29 and Oct. 7 and the flag between Oct. 8 and Thursday. If Bitcoin Cash is able to break up bullishly from the flag on high volume, it will indicate the pattern was recognized.
The measured move, determined by measuring the length of the pole and adding the percentage to the lowest price in the flag, indicates the crypto could make a move up toward the $760 level in the future.
Bitcoin Cash is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The crypto is trading below the 200-day simple moving average, however, which indicates overall sentiment is bearish.
- Bulls want to see big bullish volume come in and break Bitcoin Cash up from the flag pattern and for momentum to pop the crypto back up over the $618 level. If Bitcoin Cash can regain the level as support it can make another run up toward $636.45.
- Bears want to see big bearish volume drop Bitcoin Cash down below a support level at $590, which could cause the crypto to lose support of the EMAs. Below the levels there is support at 567 and at the lower descending trendline of the flag pattern.