Journalist
Posted:
Bitcoin cash [BCH] has been trading within a range since July 2024. This range extended from $272 to $624. Since November 15, Bitcoin Cash is up $22.2%, while Bitcoin [BTC] fell by 7.4% in the same period.
Despite the gains over the past seven weeks, the Bitcoin Cash bulls have yet to make a decisive breakout from the range.
Source: BCH/USDT on TradingView
The good news for long-term investors was rising buying volume despite price action within a certain range. Since November 2024, Bitcoin Cash has failed to break the long-term resistance at $624, but the OBV has made higher lows since then.
This indicated that buyers were on average stronger over a longer period of time. This meant that an outbreak was only a matter of time.
Should You Buy BCH Now?
In general, it is not a good idea to buy at the highest values in the range. Yes, an outbreak is possible. For example, a Bitcoin move above $94.5k, the local resistance, could turn market sentiment bullish.
At the time of writing, the available evidence does not support such an outcome in the coming days or even weeks. Until we get a breakout above $624 and a retest as support, investors should not buy BCH above $600.
Is it time to go short?
Data from Coinalyze shows that spot CVD has declined over the past three days, indicating spot selling activity. Open Interest fell almost 20% after the rejection of the range highs, a sign of declining speculative confidence.
Source: BCH/USDT on TradingView
The 1-hour chart again showed a short-term range (yellow) of $575 to $597. The psychological $600 would probably be a good opportunity to short for lower time frame traders.
The presence of imbalances on the hourly time frame from $540 to $580 (white and pink boxes) represented demand zones that could see a price increase. Therefore, short sellers should expect BCH to linger in these regions before heading lower.
A move above $605 would invalidate the short-term bearish idea.
Final thoughts
- Although Bitcoin Cash has posted respectable gains since mid-November, it wasn’t a good idea to buy the altcoin near its long-term highs.
- The short-term range below the $600 level could offer profitable trading setups, but it is not a swing trade and can be held for a day or two at most.
Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer