Bitcoin Cash, BTHUSD, is up sharply today (+8.55%) as investors pile back into cryptocurrencies following yesterday’s sell-off. Bitcoin Cash is nearing its December 29 high of $215; however, the price will need to trade above the November 29 high of $228.7 to dent to the short-term downtrend properly.
Since June 2019, Bitcoin Cash has been declining, and on September 29 the price triggered a large head and shoulders pattern with an objective of $135.8 per coin, a level that remains unmet. The pattern is derived by treating the April 15 high of $335 as the left shoulders, the August 14 high of $357 as the right shoulder, and the June high of $518 as the head of the pattern.
Simple trend analysis suggests that the November 29 high is the near-term resistance level, and as long as BCHUSD trades below this level, the price is at risk of reaching the 2019 December low of $170.30, followed by the H&S pattern target of $135.8.
However, a break to the November 29 high of $228.7, will probably mark the end of the short-term trend, and it would be fair to assume that investors will try to target the November 6 high of $308.4.
If the price manages to trade above the November 6 high, then this would probably mark the end of the longer-term bearish trend.
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Trigger behind today’s bullish move
The move higher in Bitcoin Cash and Bitcoin happened at 4 AM London time. Some are attributing the move higher in cryptocurrencies on the US, killing a top Iranian general and the risk of outright war between the US and Iran. However, if that is the case, then crypto markets took about 1.5 hours to react to the news.
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