Bitcoin Cash (BCH) Price Head & Shoulders Hints at More Downside
Bitcoin Cash (BCHUSD) price is down by almost 1% as investors continue reacting to the recent crypto rally. The price is trading at $270, which is slightly below last week’s high of $278. Other cryptocurrencies are mixed today, with Ethereum and EOS down by 0.65% and 1.35%. Bitcoin, on the other hand, is up by 0.75%.
Bitcoin cash price rose to the highest level since September last week as investors reacted to news that PayPal was starting to accept cryptocurrencies. Crypto investors took this as a stamp of approval of the crypto industry because of PayPal’s influence. The firm has more than 300 million global clients and is the third-biggest financial company after JP Morgan and Visa.
Elsewhere, JP Morgan and veteran investor, Paul Tudor Jones, drummed support for Bitcoin. They said that the currency was becoming a viable alternative to gold.
The two didn’t mention Bitcoin Cash in their reports. Nonetheless, Bitcoin cash is usually used as a proxy for BTC. This is because of the fact that it is usually a cheaper alternative. While BTCUD is trading at $13,000, BCHUSD is trading at just $270. Indeed, this explains why Bitcoin Cash outperforms Bitcoin. For example, this year. Bitcoin has risen by 35% while Bitcoin cash has jumped by more than 80%.
Another catalyst that has pushed the currency higher is the HathorMM, a new mining entity that joined the mining network. The entity now controls about 33% of the hashrate.
Bitcoin cash price technical outlook
On the four-hour chart, we see that Bitcoin cash price reached a peak of $278 last week. Since then, the shares have been struggling and are now at the highest level on October 16. It has also moved below the middle line of the Donchian channels.
Most importantly, the price has been forming a head and shoulders pattern, with the neckline at $262. Therefore, I suspect that the price will continue falling as bears aim for this support. On the flip side, a move above last week’s high of $278 will invalidate this prediction.