Bitcoin Cash Price: A close above $605, will start the party for BCH

Summary:

The Bitcoin Cash price has spent the last two weeks capped by significant overhead resistance just above the $600 mark.

The Bitcoin Cash price has spent the last two weeks capped by significant overhead resistance just above the $600 mark. Bitcoin Cash (BCH)is trading slightly firmer on Tuesday at $591.2 (+0.60%). BCH had an O.K October, gaining around 18% over the four weeks. However, it continues to underperform Bitcoin (BTC), which improved by 40% in the same period. BCH’s current market cap stands around $1.15 billion, ranking it the 21st most valuable cryptocurrency behind Algorand (ALGO).

Whilst many altcoins have jumped back t life in the last few weeks, BCH has failed to follow suit. The current price is around 65% below the May high and the same level as in January. The poor performance is particularly concerning, considering that Bitcoin Cash shares the closest relationship to BTC out of all altcoins.

Despite Bitcoin surging to a record in October, BCH is doing business 25% below the September high. As a result, the price is weighed down by several key resistance levels, hampering its ability to break higher. Furthermore, as we laid out in our premium research note, Bitcoin shows signs of a top, which, if true, could further frustrate Bitcoin cash holders.

BCH Price Prediction

The daily chart shows a descending trendline offers resistance at $604. The 100-Day Moving Average (DMA) at $604.37 reinforces the resistance. Below the market, the 50-DMA at $583.80 provides interim support, followed by trendline support at $513.0. Until BCH clears the confluent resistance around $604, the path of least resistance is lower towards the trend support. But if the Bitcoin Cash price closes above $605.00, I would expect an extension towards the 200-DMA at $666.14. Furthermore, successful clearance of the 200-day average sets the scene for a return to the September high of around $804.

This morning, BTC is heading towards the $60k support level, which will likely exert downward pressure on BCH. On that basis, the pessimistic scenario looks probable. As long as BCH remains below $605, I maintain a bearish outlook with a $513 price target. However, a close above $605 invalidates this view.