Bitcoin Analysis: Awaits bearish reversal confirmation, Ether eyes big gains

Omkar Godbole FXStreet Contributor

Bitcoin formed a bearish outside day candle yesterday after the fork happened - Bitcoin split into two - Bitcoin [BTC] and Bitcoin Cash [BCC]. As per coinmarketcap.com, the newly created BCC has gained 37.4% in the last 24 hours. Currently it trades around $404, while BTC is trading 5.5% lower at $2738 levels.

Bitcoin cash is different from Bitcoin in two ways-

It directly increases the block size to 8 MB and
It does not implement SegWit

Market cap above 100 billion

The total market cap of the virtual currency has jumped to $100.5 billion vs. previous $95.12 billion. The BTC dominance rate has dropped to 44.9% from 50.3%.

Technicals - Bearish outside day candle

Resistance

2912 {2/1 Gann fan line]
$2957 [July 20 high]
$3000 [record high]

Support

2676 [previous day’s low]
2534 [50-DMA]
2403 [July 6 low]

Daily chart

Tuesday’s bearish outside day candle if followed by an end of the day close below 2676 today would signal the rally from the low of 1758 has ended and could lead to a fresh sell-off to 2244 [3/1 Gann fan line].
On the higher side, only a break above 2925 would open doors for fresh record highs above 3000 levels.

Ether breaks trend line hurdle

Daily chart

Observations

Higher low formation
Bullish break above the falling trend line and 2/1 Gann fan line
Inverse head and shoulders breakout on the RSI

Ether looks set to breach the 50-DMA level of 254 in favor of 275 [3/1 Gann fan line]. Dips to 100-DMA of 197 are likely to be bought into. Only an end of the day close below the rising trend line would revive the bearish view.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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