For the last week, the Bitcoin Cash price has stalled below $600. But if BTC reclaims $40,000, BCH could outperform the market leader by a long way.
Bitcoin Cash (BCH) is marginally lower today as the cryptocurrency market digests Bitcoin losing the psychological $40,000 level.
BCH is trading at $532.35, down $11.44 (-2.09%). Over the last two weeks, the positive performance has lifted Bitcoin Cash’s market back above $10 Billion, from July’s multi-month low of around $7.5 billion.
This ranks BCH as the 13th-largest cryptocurrency after recently being overtaken by ChainLink.
Like most of the market over the last few days, the price has been trading broadly sideways. And as long as BTC fluctuates on either side of $40k, this may remain the case. However, the technical outlook for cryptos has certainly improved, and the chances are that this consolidation is a pause before the rally resumes.
And considering the Bitcoin Cash price has underperformed Bitcoin on the way down, it may well outperform if BTC heads higher.
Robust horizontal support is visible on the daily chart at $380. Investors should view this as essential to the coins prospects. On that basis, as long as BCH remains above $380, the long-term outlook is constructive.
In the near term, the 50-day moving average at $495.35 provides the first line of support.
Above the market, horizontal resistance is seen at Friday’s $580 high. A clearance of $580 brings the important 200 DMA at $637.01 into view. Should BCH close above $637.01, the 100 DMA at $695.86 should offer little resistance.
Although I am encouraged by the recent price action, BCH is unlikely to rally in isolation. Therefore, traders should take cues from Bitcoin and Ethereum before forming an opinion on BCH.
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