- Bitcoin Cash Node becomes the dominant blockchain after the blockchain split over the weekend.
- BCH/USD is poised for an extended breakdown after sliding beneath ascending channel support.
Bitcoin Cash protocol underwent another hard fork that saw the blockchain split into two; Bitcoin Cash ABC (BCH ABC) and Bitcoin Cash Node (BCHN). AntPool mined the genesis block that started the spit.
At the moment, Bitcoin Cash Node has received enough hash power support, becoming the dominant chain. According to CoinMarketCap, most users are unlikely to be affected by the split but asked them to be on the lookout for instructions.
Bitcoin Cash holding above critical support
Following the hard fork, Bitcoin cash retreated below the simple moving averages, including 100-day SMA, 200-day SMA and 50-day SMA. The digital asset revisited the buyer congestion at $240 but recovered immediately to towards $250.
At the time of writing, BCH changes at $246, while bulls fight to break above the confluence formed by the 50 SMA and 200 SMA. BCH/USD must close the day above this crucial level to sustain the recovery. Otherwise, a breakdown to $220 and $200 support levels seems imminent. Besides, Bitcoin Cash has already broken below the ascending channel’s lower boundary, giving credence to the bearish outlook.
BCH/USD daily chart
The same daily chart shows that the Relative Strength Index does not agree with Bitcoin Cash sustaining an uptrend. The RSI forms a lower high pattern, while the price action is trending upward in a series of higher lows, as shown on the chart. In other words, bullish momentum is losing steam and a correction is around the corner. If support at $240 fails to hold, Bitcoin Cash might spiral to $220 and $200, respectively.
BCH/USD daily chart
IntoTheBlock’s IOMAP model reveals increasing resistance ahead of Bitcoin Cash. The most robust anchor runs from $253 to $260. Here, roughly 87,000 addresses previously bought about 2.4 million BCH. It is doubtful that BCH will climb above this seller congestion zone to rally towards $300.
On the flip side, the lack of vital support areas adds credibility to the bearish narrative. Therefore, the least resistance path seems downwards, at least for now.
Bitcoin IOMAP chart
It is worth noting that the bearish narrative will be invalidated if Bitcoin Cash closed the day above the 50-day SMA and 200-day SMA. There will be some resistance at the 100-day SMA, but if BCH overcomes the immediate hurdle. Moreover, buyers will have ample time to plan how to overcome the IOMAP resistance at $260 and pave the way for gains above $275.
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