Bitcoin Cash price in bear market Buy the dip?

  • Bitcoin Cash’s price has dropped by 22%, moving it into a bear market.

  • The coin is expected to have more short-term downside as it moves out of the overbought zone.

  • Some investors believe this is a good time to use dollar cost averaging (DCA).

Bitcoin Cash’s price has entered a bear market as investors begin to take profits following its impressive performance in June. The coin reached a low of $250 on Wednesday, which is about 22% below its highest level in June.

BCH enters a bear market

In June, Bitcoin Cash experienced one of its best periods as investors turned to proof-of-work cryptocurrencies after the SEC lawsuit against Binance and Coinbase. Investors believe that coins like BCH, Verge, and Litecoin will benefit if the SEC decides to wage war against crypto tokens like Solana and Cardano.

Bitcoin Cash’s price has now fallen more than 20% from its highest level in June, officially putting it in a bear market. This decline is largely due to profit-taking, as BTC rose more than 250% between its lowest and highest points in June.

Historically, investors tend to exit an asset after it has risen sharply in a certain period. When the price drops, the so-called Fear of Missing Out (FOMO) situation reverses, and those who bought during the uptrend start to exit.

BCH’s price also retreated as Bitcoin struggled to break above the upper side of the bullish flag pattern that has been forming. BTC is currently hovering around $30,300, and there is a possibility that it will soon drop below $30,000.

Furthermore, BCH also declined as American stocks retreated after the Independence Day holiday. The Dow Jones index fell by 50 points, while the Nasdaq 100 dropped by about 20 points.

Bitcoin Cash price forecast

Looking at the daily chart, we can see that BCH’s price has been retreating in recent days. This retreat began after the coin reached the extreme greed zone. It has now formed a three black crows pattern, which occurs when three consecutive red candles appear.

Bitcoin Cash is still significantly above the 50-day and 100-day moving averages, while the Relative Strength Index (RSI) has fallen below the overbought level. Therefore, it is likely that BCH’s price will experience further downside in the near term before eventually making a comeback.

This pullback will likely lead to a drop towards the next key support level at $210, which is the 25-day moving average. Therefore, using dollar cost averaging, where a trader buys the coin as its price drops, could be a good strategy, as it is expected to ultimately bounce back.

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