From yesterday’s open at $447 the price of Bitcoin Cash has increased by 26.48% and is currently trading at around $565.
Looking at the daily chart you can see that the price upward trajectory has been stopped out after it broke out off of the descending channel near the horizontal resistance level at $606.
Zooming into the 4-hour chart you can see that the price has been stopped out at the minor range resistance which isn’t significant enough to stop this upward momentum.
This is why I believe that the price is heading further up to the resistance zone support at $606 but we may see a retracement fist to the descending channels resistance line where the price is going to look for support.
The price didn’t go to $390 for a support retest which is why I don’t have any confidence in this upward movement. If it did I would be calling out for a trend reversal.
As you can see two last times we have seen a descending channel or a wedge structure from which the price broke out that was to around 0.236 Fibonacci level.
The current price action structure resembles those prior once but I am unsure of whether this is a start of an uptrend or another fractal with more downside potential for the price of Bitcoin Cash, as this last upswing suppressed the mentioned Fibo level. As the price has been rejected by the next 0.382 Fibonacci level
it is unclear whether this would be broken and the price is heading further up. In order to conclude that I have zoomed into the 30 min chart in order to inspect the waves.
Looking at the 30 min time-frame I have counted the waves and as you can see the first impulsive five-wave move is done. Now we are seeing a retracement that retests the minor range resistance for support.
Taking into the account the Elliott Wave Principle which says that after an impulsive move a correction occurs I would now be looking at a correction that would retest some significant support level and ideally that would be the descending channels resistance line. I don’t feel comfortable with the price going further up if that hasn’t been done, because then I would consider this upswing as a recovery before new lows. If, however, the support gets retested and the price finds support, then I would be expecting that the price continues on upward in the following period.