von • Bitcoin Cash (BCH) price has moved into a bear market after reaching its highest level in June and falling by 22%.
• The decline is attributed to profit-taking as BTC was up by more than 250% between the lowest and highest points in June.
• BCH also dropped as American stocks retreated after the Independence Day holiday, forming a three black crows pattern with an RSI below the overbought level.
Bitcoin Cash Enters Bear Market
Bitcoin Cash (BCH) price has moved into a bear market after reaching its highest level in June and falling by 22%. Investors believe that coins like BCH, Verge, and Litecoin will benefit if the SEC decides to move against crypto tokens like Solana and Cardano.
Cause of Decline
The decline is attributed to profit-taking as BTC was up by more than 250% between the lowest and highest points in June. Some investors believe this is a good time to dollar cost average. Further, BCH also dropped as American stocks retreated after the Independence Day holiday.
Technical Analysis
On the daily chart, we see that BCH price has retreated in the past few days. This retreat started after the coin moved to an extreme greed zone. The coin has now formed three black crows pattern with an RSI below the overbought level. Bitcoin Cash remains much higher than 50-day and 100-day moving averages.
Profit Taking
Historically, investors tend to exit an asset after rising sharply in a certain period when it drops; this so-called Fear of Missing Out (FOMO) situation reverses causing people who bought during uptrends start to exit their positions. In addition, Bitcoin price struggled to move above the upper side of bullish flag pattern that formed which caused downward pressure on BCH price.
Conclusion
Overall, I suspect that Bitcoin Cash price has some more downside in near term due to profit taking combined with technical indicators suggesting bearish momentum for short term trend direction.
