Two weeks ago, AMBCrypto asserted that Bitcoin Cash [BCH] was bound to see losses from the $474 local high and slide toward $419 and below $400.
The cluster of short liquidations from $480-$500 could pull prices higher in the short-term, the report warned, but the long-term picture remained bearish.
Much has changed since then, but at the same time, not much has changed. The difference lay in perspectives and bias across timeframes.
In the past two weeks, Bitcoin Cash formed a higher low at $437, defended the $443 support level with fervor, and drove a rally as high as $489.3 on Wednesday, the 6th of May.
The OBV has made new local highs, and the RSI once again climbed back above neutral 50. These changes appeared to hint at multiple bullish changes in the short-term.
Here’s how the $486 sweep cemented bearish Bitcoin Cash conviction
The altcoin has traded within a two-year-long range between $272 and $684. In recent weeks, it has tested the mid-range point at $480 as resistance.
Traders should also remember that BCH has a bearish swing structure on the 1-day chart. Its sweep of the $486 level was followed by a short-term rejection, and the altcoin was trading at $461 at press time.
Traders’ call to action- Stay bearish
The H1 chart was bullish, but the $460 short-term support zone was being retested at the time of writing. This level had been tested as resistance in mid-April, but appears to be flipped to support.
To line up the timeframes, the weekly showed a drop below the mid-range resistance, and the daily chart showed a bearish swing structure.
The move to $489 can easily turn into a swing failure pattern and result in a bearish continuation.
This is what traders can expect in the coming days. However, the invalidation should also be understood.
At the time of writing, a daily session close above $486 would indicate a bullish structural shift.
Final Summary
- Bitcoin Cash attempted to rally beyond $490, but as things stand, this move might herald further losses for the altcoin.
- The $460 support zone was important in the short term. A drop below it would indicate further bearishness, giving traders an opportunity to enter.
