Bitcoin Cash (BCH) is still in a descending channel as the price prepares to test the bottom of this channel that extends all the way back to its all time high. Since the beginning of the correction, Bitcoin Cash (BCH) has been trading in this descending channel. However, recently the price has found support at the long term trend line and is now likely to break out of this descending channel in the weeks to come.
RSI analysis for the BCH/USD weekly chart above suggests that the price has almost bottomed out and that Bitcoin Cash (BCH)’s correction has come to an end. Currently, RSI for Bitcoin Cash (BCH) has been trading in a triangle since the beginning of this correction. It has now reached the full extent of its movement inside that triangle and is supposed to breakout before September. Considering the correction Bitcoin Cash (BCH) just had and the overall outlook of the market, there is a higher probability that this breakout will be to the upside and that Bitcoin Cash (BCH) will find support at the long term trend line.
The price for Bitcoin Cash (BCH) has also been trading in a triangle which extends all the way till November. While it may take some time to break that triangle, RSI indicates that Bitcoin Cash (BCH) is ready for a trend reversal from these levels. The price action is currently heavily in favor of the bears as Bitcoin Cash (BCH) is trading below the 21 EMA. The volume is also low which means a big market player can easily trigger a long term bear market.
In the case of Bitcoin Cash (BCH) that big player is Bitmain, a company that currently owns more than 6% of the Bitcoin Cash (BCH) in circulation. Their strategy and reasons for hoarding that amount of Bitcoin Cash (BCH) is not fully clear yet but if they clamped down the supply, it is obvious that they had their plans and probably still do. This is why it is unlikely that they would dump a big amount of Bitcoin Cash (BCH) on an exchange to push it into another bear market considering they are holding their BCH at a loss since the correction. However, it is important to note that now that this has come to light, investors in Bitcoin Cash (BCH) will have to keep an eye on Bitmain to see if they are affecting supply of BCH in the market.
The weekly chart above for BCH/BTC shows that Bitcoin Cash (BCH) is likely to break out of a falling wedge in the weeks ahead to start a new cycle. RSI seems to have reached the extent of its movement within a falling wedge and will break out sooner than the price of Bitcoin Cash (BCH). Considering the large amount of Bitcoin Cash (BCH) coins that Bitmain owns, investors have become more cautious about investing in Bitcoin Cash (BCH).
However, popular Bitcoin Cash (BCH) figures like Roger Ver still spare no opportunity to make people believe that Bitcoin Cash (BCH) is actually the ‘real Bitcoin’. They also own Bitcoin.com and have recently created a new office for Bitcoin.com as well. It is extremely unlikely that Bitcoin Cash (BCH) will eventually replace Bitcoin (BTC). The more likely scenario is that solutions like Lightning Network and Enigma will address issues like scalability and privacy for major cryptocurrencies, eliminating the need for spin off coins like Bitcoin Cash (BCH) and Litecoin (LTC) in the long term.