Bitcoin Cash recently busted through its symmetrical triangle bottom to signal that further losses are in the cards. The chart pattern spans $800 to $1800 so the resulting drop could be of the same height.
Price has also completed its pullback to the broken support to confirm that sellers are returning. A break below the latest lows could lead to a more prolonged drop.
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the selloff is more likely to continue than to reverse. The 100 SMA has also held as dynamic resistance and might continue to keep gains in check.
However, stochastic is pulling up from oversold conditions to show that bullish pressure is returning. RSI has some room to head south but is also closing in on oversold levels to show weakening selling momentum. Price has yet to break past the 200 SMA dynamic inflection point to confirm a potential uptrend, though.
Cryptocurrencies like Bitcoin Cash keep sliding lower in the past few days as headlines have been far from positive. Following Japan’s plans to shut down Binance in the country, South Korea has also expressed the same sentiments.
Soon after, Twitter announced plans to ban cryptocurrency ads from its platform in a move similar to that of Facebook and Google. This could mean fewer new accounts opened and therefore lower volumes and activity.
To top it off, risk aversion has weighed on Bitcoin Cash and its peers while traders prefer to put their funds in safe-haven holdings like gold and the dollar. With a shortened trading week up ahead of the end of the quarter, profit-taking could also be seen, so this might mean a bit of reprieve from the selloff. Then again, the lower liquidity could give rise to volatile moves on headlines.