Bitcoin Cash has been hit by massive sell-offs over the last five days, resulting in a retracement to levels not seen in months.
On the weekly timeframe, the asset lost more than 16% last week. A closer look at price action over the last seven days shows that most of the selling occurred over the weekend. Cumulatively, altcoins lost almost 10% between Saturday and Sunday.
After the bearish close, bulls tried to reverse the trend with a recovery. However, current prices indicate that buying pressure remains subdued. The asset printed a Doji on Monday and is down almost 2% on Tuesday.
Beyond the buying and selling, a critical development occurred last week. Since September 22, BCH has traded above $266, although it briefly slipped below the level on several occasions. It has now decisively broken below this barrier and is searching for another key support level.
A similar pattern is evident on the total cryptocurrency market capitalization chart. For the first time in almost three months, valuations decisively broke below $2.55 trillion. The market has since shed more than $100 billion following the breakdown.
The global cryptocurrency market capitalization chart shows that the sell-offs were not limited to BCH. In fact, the decline affected almost every crypto asset. Following Wednesday’s uptick, most assets have yet to halt their downtrends.
While sentiment remains notably bearish, a series of fundamental developments has also added to the uncertainty. For example, Sunday’s decline coincided with reports surrounding Nvidia CEO Jensen Huang that reportedly triggered a sharp reaction across AI-related stocks and cryptocurrencies.
Although the market reaction to the news appears to be waning, the crypto market has yet to recover fully. The risk of further declines remains elevated for BCH.
Bitcoin Cash Breaks Out
On the weekly chart, the asset is edging closer to a second straight week of losses. Following last week’s significant decline, it is printing another red candle. However, that is not the most concerning development.
Since June, BCH has consistently registered higher lows. As seen in the chart above, these lows formed an integral part of its ascending pattern. Last week’s low remained within the boundaries of this chart pattern, but the altcoin has since moved below the structure.
Although it is too early to classify the recent breakdown as decisive, a further decline and another red weekly candle next week would strengthen the bearish signal.
The 1-day chart highlights the implications of this development. The likelihood of further declines appears elevated. Since breaking below the $266 barrier, BCH has maintained a downward trajectory.
Based on current prices, the next level to watch is $215. However, demand concentration around this mark remains relatively low, which could reduce the chances of a strong rebound. The next major support level is around $200, which could become the asset’s next destination. A move to this level would represent a decline of approximately 14% from current prices.
Although prior price action points to a high probability of further declines, indicators such as the RSI and Bollinger Bands suggest a possible recovery.
The Relative Strength Index (RSI) is currently at 31, meaning another price decline could push it into oversold territory. This could set up a rebound. Based on previous price movements, a recovery could begin this week.
Similarly, Bitcoin Cash is trading below the lower Bollinger Band, another indication that the asset may be due for a rebound.
BCH remains vulnerable to another 14% decline, with $200 emerging as the next major support if selling pressure persists. However, the RSI and Bollinger Bands suggest that a short-term recovery could interrupt the downtrend. The key question is whether buyers can regain control before the asset tests lower support levels. Until then, the bearish breakout remains the dominant signal.
