The second week of December 2020 has been very negative for the cryptocurrency market – Ethereum, Bitcoin, Bitcoin Cash, and Ripple are leading this trend, making the biggest falls. The price of Bitcoin Cash has suffered one of the biggest losses on the cryptocurrency market, and in less than three weeks, the price of BCH has weakened from $370 below $256.
Fundamental analysis: Bitcoin Cash is still a very risky cryptocurrency
The cryptocurrency market is losing some ground this trading week, but the “bullish trend” still remains very strong. The ongoing sell-off surrounding cryptocurrencies weighed on Bitcoin Cash, and BCH’s price is trading very close to the current support level that stands around $250.
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This cryptocurrency history is closely related to Bitcoin because Bitcoin Cash broke off from the original Bitcoin network on 1 August 2017. Bitcoin Cash has rapidly become one of the most valuable cryptocurrencies globally, and it is also important to mention that Bitcoin Cash has lower fees than Bitcoin.
Bitcoin Cash allows more transactions to be processed because of increased block size i.e. 8 MB. This is still a very risky cryptocurrency, in my opinion, and until Bitcoin advances again, the price of Bitcoin Cash will not see any significant developments soon. This cryptocurrency price can weaken even more this December, and maybe it is not the best time to invest in Bitcoin Cash (BCH).
Technical analysis: Bitcoin Cash is trading very close to the current support level that stands around $250
The future of Bitcoin Cash remains unclear, and this cryptocurrency faces several challenges and uncertainties moving forward. Bitcoin Cash has a short-term resistance area at $260, and it would take a break above this level to confirm a new leg higher towards the $270 resistance level.
On this chart, I marked significant resistance and support levels. The critical support levels are $250 and $240, $270 and $280 represent the resistance levels. If the price jumps above $270, it would be a signal to buy Bitcoin Cash (BCH), and we have the open way to $280. Short-term traders should always use “stop-loss” and “take profit” orders when opening their positions because the risk is exceptionally high. On the other side, if the price falls below $250, it would be a strong “sell” signal, and we have the open way to $240 or even $200.
Bitcoin Cash price has weakened from $293 to $255 since the beginning of December, and the current price stands around $256. The future of Bitcoin Cash remains unclear, and this cryptocurrency faces several challenges and uncertainties moving forward. This is still a very risky cryptocurrency, and the price of Bitcoin Cash can weaken even more this month. If the price falls below $250, it would be a firm “sell” signal, and we have the open way to $240 or even $200.