Bitcoin Cash is on a consolidation pattern as investors enter into a profit-taking mode. On Monday, it surged to a two-week high, thus surpassing the psychological level of 500. High volatility, which has been one of the key characteristics of cryptocurrencies, resulted in a pullback before the asset rebounded to find support at 500.
Notably, a similar trend is observable in the other altcoins. Bitcoin, which is the leading cryptocurrency by market capitalization, is consolidating around the psychological level of 40,000 after surging by 5.70% on Tuesday. Similarly, Ethereum is wavering around 2,300 after its 5.59% rise on Tuesday.
On the one hand, the cautious stance by the Federal Reserve is likely to offer support to Bitcoin Cash and the other cryptocurrencies. On Wednesday, the Fed Chair, Jerome Powell indicated that FOMC will continue evaluating the economy’s progress in the ensuing meetings. The bank left its accommodative policy unchanged until further substantial progress is made on inflation and employment.
Bitcoin Cash is consolidating for the second consecutive session. At the time of writing, it was down by 0.76% at 508.01. On a two-hour chart, it is trading above the 25 and 50-day exponential moving averages.
In the near term, I expect Bitcoin Cash to trade within a tight range of between 500 and Wednesday’s high of 520.15. A bullish breakout will have the bulls eyeing the three-week high of 538.44 or higher at 550. On the lower end, a move below the psychological level of 500 will likely place the support level along the 50-day EMA at 489.05 or lower at 475.