Key Points

Bitcoin cash price declined sharply and broke a major support near $560 against the US Dollar.

Yesterday’s highlighted a contracting triangle pattern with support at $580 on the hourly chart of BCH/USD (data feed from Kraken) was broken.

The pair is now looking to settle below the $500 level, which would be a strong bearish sign.

Bitcoin cash price tumbled along BTC against the US Dollar. BCH/USD is now attempting a break below a major support of $500.

Bitcoin Cash Price Support

Yesterday, due to Chinese Ban on ICOs all cryptocurrencies faced heavy selling pressure, including Bitcoin cash price against the US Dollar. The price was looking to trade higher, but after the news, there was a sharp decline below the $600 level. There was a failure to break the 61.8% Fib retracement level of the last drop from the $680 high to $575 low. The downside move was such that buyers failed to protect a major support area near $560.

During the downside move, yesterdays highlighted a contracting triangle pattern with support at $580 on the hourly chart of BCH/USD was also cleared. It has opened the doors for more losses. Recently, the price traded as low as $501.00 and recovered. However, sellers appeared near the 23.6% Fib retracement level of the decline from the $680 high to $501 low. It seems like the price has completed a correction at $550 and likely to resume its downside.

On the downside, the last swing low of $501 would be tested again. If buyers fail to protect $501, there can be a break below $500 in the near term.

Looking at the technical indicators:

Hourly MACD – The MACD for BCH/USD is struggling to recover from the recent bearish momentum.

Hourly RSI (Relative Strength Index) – The RSI is moving south and remains in the bearish zone.

Major Support Level – $500

Major Resistance Level – $540

Charts courtesy – Trading View, Kraken