Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Bitcoin saw a sharp drop from around 6% from the supply zone at $48k to trading at $44.6k at the time of writing. Bitcoin Cash followed suit, posting a 4.5% decline the previous day. However, BCH’s short-term market structure looked encouraging for the bulls.
Over the past week, BCH has ranged from $355 to $386. Earlier this month, the price saw a sharp rise from the $277 support level. Therefore, this range formation after a strong move can be seen as consolidation before the next big move for BCH .
The Bollinger bands were relatively broad as the price bounced between the $386 resistance level and the $361 support level. While the price has failed to register a higher high, the previous swing low of $353.3 has not yet been breached.
Therefore, the $355-$360 could be a buying opportunity targeting $386 and $400.
However, a session that would close below USD 353 would shift this bias, and a move towards USD 340 could occur in the near term.
On the 4-hour chart, the RSI fell below the neutral 50, but not by a wide margin. It stood at 44.7 and has fallen in the past week to signal the slowdown in bullish momentum.
On the other hand, the OBV has steadily increased in March. This northward march was a sign that buying volume has been consistently higher than selling volume over the past three weeks.
On the larger time frames, the market structure for Bitcoin was bullish. While a drop to $42k and $40k could be observed, the price was likely to move higher again in search of liquidity. As things stood at press time, BTC was in a high-demand area and a rebound was likely.
Bitcoin Cash could follow in Bitcoin’s footsteps and make further gains in the coming days, possibly even breaking the $400 resistance zone.