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Bitcoin Cash (BCH) Downside Thrust Underway Before Sharp Bounce?

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Bitcoin Cash Price Analysis
This week, there was a sharp rally in bitcoin cash from the $255 support area against the US Dollar. BCH/USD rallied above the $285 and $300 resistance levels. There was even a close above the $300 level and the 55 simple moving average (4-hours). The price climbed above the $320 level, but it struggled once again near the $335 and $340 resistances. A swing high was formed at $336 and recently there was a downside correction.

Bitcoin, Ethereum and ripple too corrected lower, dragging bitcoin cash price below the $305 and $300 support levels. There was a break below the 50% Fib retracement level of the last wave from the $255 low to $336 high. More importantly, there was a break below a major bullish trend line with support at $301 on the 4-hours chart of the BCH/USD pair. The pair tested the $290 support level and it is currently near the 55 simple moving average (4-hours).

The 61.8% Fib retracement level of the last wave from the $255 low to $336 high is a strong support near the $286 level. Below $286, the price could extend its decline towards the $275 or $274 support. Once the current correction is complete, the price is likely to bounce back above $300 and $305. The next key resistance is at $315, above which the price may revisit the $335 and $340 resistances.

Looking at the chart, bitcoin cash price seems to be struggling below $305 and $300. It must break a connecting bearish trend line with current resistance at $301 to move into a bullish zone. If it continues to struggle, there is a risk of an extended drop to $285 or $275. If the bulls fail to defend even $275, the price may revisit the $255 support area.

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Technical indicators
4 hours MACD – The MACD for BCH/USD is gaining pace in the bearish zone.

4 hours RSI (Relative Strength Index) – The RSI for BCH/USD declined and it is now well below the 45 level.

Key Support Levels – $285 and $275.

Key Resistance Levels – $300 and $315.