Bitcoin (BTC) may have fallen 40 percent on a year-to-date basis, but the cryptocurrency still seems destined to eclipse its rival bitcoin cash (BCH) in the short term, technical charts indicate.
At the time of writing, the Bitcoin Cash / Bitcoin exchange rate (BCH / BTC) is seen as 0.1104 BTC in Bitfinex, the lowest level since March 9. BCH had fallen to 0.10723 BTC on March 7, but defended the fall of channel support, as seen in the chart below.
In the following days, the BCH / BTC ratio has regained its equilibrium, but the demand for BCH, the fourth largest cryptocurrency in the world by market capitalization, was not strong enough to overcome the obstacle of the descending channel.
The corrective rally was exhausted at the three-week high of 0.12489 BTC on March 17. Since then, bitcoin cash bulls have made numerous attempts to scale the resistance of the downlink channel. However, as the graph shows, the resistance turned out to be a hard nut to crack and the BCH / BTC pair ended up creating lower highs along the channel resistance.
In addition, BCH / BTC yesterday created a doji type “gravestone” pattern, which indicates that the bulls are leaving the market.
Momentum studies are also skewed towards bears, with the 5-day moving average (MA) and the 10-day MA moving south today. The Relative Strength Index (RSI) has also moved into bearish territory (below 50.00), indicating the possibility of a further decline in the exchange rate denominated in BTC.
The pair seems ready to test 0.10723 BTC (March 7th minimum) and may fall to the downlink support, currently seen at 0.1018 BTC, which means that operators are likely to jump from bitcoin to bitcoin.
Only a high volume break above the resistance of the downlink channel would indicate a change from bearish to bullish trend.