Bitcoin Cash price has moved into a bear market after falling 22%.
The coin has more short-term downsides when it moves from the overbought zone.
Some investors think this is a good time to dollar cost averaging (DCA)
Bitcoin Cash the price has moved into a bear market as investors start to take profits after the spectacular performance in June. The coin retreated to a low of $250 on Wednesday, about 22% below its June high.
BCH enters a bear market
Bitcoin Cash had one of the best periods in June as investors moved to proof-of-work cryptocurrencies following the SEC lawsuit against Binance and Coinbase. Investors believe that coins like BCH, Verge and Litecoin will benefit if the SEC decides to go to war against crypto tokens like Solana and Cardano.
Bitcoin Cash price has now moved into a bear market by falling over 20% from its June high. This decline is mostly due to profit taking as BTC rallied more than 250% between the June lows and highs.
Historically, investors tend to exit an asset after it has risen sharply over a period of time. When it drops, the so-called Fear of Missing Out (FOMO) situation reverses and people who bought during the uptrend start to exit.
The BCH price also retreated as Bitcoin price struggled to break above the upper side of the bullish flag pattern that has formed. BTC is hovering at $30,300 and there is a possibility that it will move below $30,000 soon.
Furthermore, BCH also fell as US stocks retreated after Independence Day. The Dow Jones index retreated by 50 points, while the Nasdaq 100 fell by about 20 points.
Bitcoin Cash Price Forecast
On the daily chart, we see that the BCH price has reversed over the past few days. This retreat started after the coin moved to the extreme greed. The coin has now formed three black crow patterns, which occurs when three red candles follow each other.
Bitcoin Cash remains well above the 50-day and 100-day moving averages while the Relative Strength Index (RSI) moved below the overbought level. Therefore, I suspect that the Bitcoin Cash price has some more downside in the short term before it makes an eventual comeback.
This pullback is likely to drop to the next key support at $210, which is the 25-day moving average. Therefore, dollar cost averaging, where a trader buys the coin when it falls, can be a good idea because it will eventually bounce back.
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