Bitcoin Cash Surges Past $580 as ADX Signals Trend Acceleration
Market Pulse
- Bitcoin Cash closes August with a remarkable performance, especially in the last two weeks of trading.
- The third-largest digital asset with a market capitalization of $20 billion climbed above crucial resistance zones at $525 and $580.
- The bullish price action resulted in Bitcoin Cash being a top gainer in the cryptocurrency market in August, with an increase of 35.7%.
Furthermore, a wider gap lifted the token past another barrier at $600 and allowed bulls to focus on gains beyond $600.
Bitcoin Cash began the new year with a powerful 35.7% monthly rally. This positions it as the standout performer among major Layer-1 blockchains. But it’s not just an average relief rally. The strong move from the December low of $428 to current levels of $581.71 is a structural break that has trapped many traders on the wrong side of the market. The big question for traders now will be whether BCH can hold above the key psychological level of $580, or if profit taking will lead to a test of support areas.
| Metric | Value |
|---|---|
| Asset | BITCOIN CASH (BCH) |
| Current Price | $581.71 |
| Weekly Performance | 11.17% |
| Monthly Performance | 17.40% |
| RSI (Relative Strength Index) | 56.9 |
| ADX (Average Directional Index) | 25.9 |
| MACD (MACD Level) | 17.72 |
| CCI (Commodity Channel Index, 20-period) | 93.47 |
RSI Holds 60 Floor Despite Recent Pullback – Bulls Maintain Control
The oscillator hits 60.91 on the daily and momentum remains strong on the side of the bulls and hasn’t slipped into overbought conditions. Most interestingly, the RSI has held the 60 level as support for the third time during this rally. A duplicate RSI setup was seen in September before Bitcoin Cash made a push from $320 to $470, although that took nearly six weeks to accomplish compared to this three-week sprint.
For swing traders then, this balanced RSI suggests there is still room for further upside, with only a daily close below 60 encouraging profit taking for the cycle. A weekly close above the previous all-time high close of $873 would likely clear the path for $1,000+ targets. Additionally, any retest of the 2017 high would now be supported by the 200-week MA and the yearly pivot.
ADX at 25.85 Confirms Shift From Sideways Grind to Trending Market
At 25.85, the ADX reading reflects a definitive change from December’s ranging, choppy environment in which ADX remained below 20—at that time range trading was the dominant strategy to use. The move above the 25 level occurred right as BCH broke above $520, solidifying that breakouts technically have the necessary strength to cause underlying trends.
For example, relative strength (RSI) is now in slightly overbought territory around 70 and Copar is at 0.72. Still, these momentum oscillators can reach significantly overbought territory in powerful uptrends before seeing a pushback; Copar peaked at 0.81 during BCH’s initial surge in late January and 0.79 in March for an ongoing rebound.
20-Day EMA at $545 Transforms From Resistance to Critical Bull Defense
The 20-day EMA has since converted to a robust support, which is substantiated by the average trade volume flowing off the back of advancing spreads. Bulls will be looking to capitalize on the 10-day EMA providing short-term support with the potential of pushing for extended gains this week.
Traders should observe where price closes relative to this area in conjunction with the EMAs. The 50 & 100 EMAs are compressing as noted, keeping expectations high for robust price action in the coming weeks. A monthly close above the 200 MA (purple), currently $617, would add further confirmation that May was indeed the cycle low. Alternatively, definitive closes below the 50-day EMA would alert traders that $539 will likely be tested and the cycle low may be in question.
Resistance Clusters Between $590-$607 While Support Builds From $545
Sellers have placed orders in the $590-$607 region above today’s prices, with the monthly high of December meeting psychological round figures there. The prompt resistance is at $590, where profit-taking was seen during yesterday’s test higher, and then at the even more solid $607 which was the limit of December’s increase. The volume profile indicates substantial supply between these two levels. This means buyers will have to show persistent strength if they are to push through this overhead supply.
The support architecture appears even sturdier given BCH’s systematic climb. The first line of defense resides between $545 and $550, as this is where the 20-day EMA and last week’s consolidation top meet. Directly beneath stands the $535 to $539 cluster, which coincides with the 50-day and 100-day EMA. Hence, a solid floor lies roughly 8% lower should the previously mentioned zone give way. Strengthening the case further is that Bitcoin Cash has been constructing these layers of defense as the top-performing large L1.
Buyers are in control as long as they maintain the $545 pivot on pullbacks. The weekly chart has BCH respecting an ascending channel from October’s lows, with the lower bound of the channel near $520 offering significant structural support. This structure is similar to accumulation patterns that have unfolded prior to the last 50%+ moves higher, although it’s worth noting the weekly RSI at 79 indicates some consolidation might be necessary before an extension higher.
Bulls Require Close Above $607 to Confirm Next Leg Toward $650
The bulls need to make sure they get a daily candle close above $607 with solid volume to confirm the breakout and continuation to our $650 measured move target. BCH sector leadership coupled with improving technical conditions serves as the fundamental spark while clearing December’s high gets those stop-loss orders swarming and brings in the momentum crowd. If the bulls can power through the $607 level, the next significant resistance area doesn’t come into view until the $640-$650 zone.
If BCH can hold $545 support, buyers should step in, limiting the downside despite the lofty intraday RSI. The first resistance is now at $565, with the 200-day EMA at $580 currently acting as major resistance. As long as price holds the 20-day EMA, a retest of the $600 zone is more likely over the next week or two, with a break higher opening up psychological resistance at $625 and $650.
With effective EMA and price support at $500-$515, odds still favor a resolution to the upside and a retest of the recent highs. Only a failure to contain recent weakness and breach of $485 would threaten the broader uptrend and warrant reevaluating exposure. Initial resistance sits at $550, with the next upside target at $565-$570.
