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Bitcoin Cash Shows an Incomplete Bearish Sequence


Bitcoin Cash (BCHUSD) shows an incomplete corrective sequence, which suggests the probability of a new decline in the coming trading sessions.

Bitcoin Cash, in its 4-hour chart, shows a corrective process started on February 15th, when the cryptocurrency began to decline from $496 in a three-wave sequence of Minute degree labeled in black. This downward sequence ended on March 16th, after the bearish failure in the fifth wave of wave ((c)) in black, which found support at $147.

Once the price action completed the bearish three-wave sequence, BCH ended the wave A of Minor degree labeled in green and started a second corrective move of the same degree corresponding to wave B in green.

Considering the alternation principle of the Elliott Wave Theory, the price of Bitcoin Cash, in its first downward movement, declined following an aggressive bearish momentum. In this context, the current wave B, by alternation, should develop its structure at a slower pace than wave A in green.

In this context, wave B could progress as a triangle structure. According to the Wave Theory, the triangle pattern tends to appear in waves 4 and B after an aggressive movement consolidating as a complex formation. In consequence, the development of a triangle pattern fits the current scenario.

For the following trading sessions, we expect BCHUSD to create a sideways continuation, which should complete the potential triangle pattern in progress. After this completion, BCH could make a limited upside that would not surpass the previous swing high at $352.96, corresponding to the last swing high of wave ((b)) in black, which belongs to wave A. Once the current wave B in green ends, we expect a new decline that could re-test the last March lows.

In conclusion, short-term, our preferred positioning remains on the bearish side. However, if BCH advances in a triangle pattern, a breakout of the trendline that joins the ends of waves (b)-(d) would change our bias from bearish to bullish with a potential target at the next resistance at $352.96 zone.

Finally, if the price action moves Bitcoin Cash above the level of $496, our downward scenario will fail, and we should consider the start of a new bullish cycle.

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Source: https://www.cryptorocket.com/news/bitcoin-cash-shows-an-incomplete-bearish-sequence/
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