- Bitcoin Cash bulls are looking forward to an impressive price action above a symmetrical triangle pattern.
- BCH/USD must break out of the ongoing consolidation to sustain the uptrend illustrated by the IOMAP model.
Bitcoin Cash has recovered considerably from the downswing experienced after the $339 peak achieved in August. At the time of writing, BCH looks towards a potential breakout to $320 or a breakdown that would erase the gains made to $193.
Bitcoin Cash bullish outlook gaining traction
BCH is trading at $259 while holding at the apex of a symmetrical triangle pattern. This pattern is typical in technical analysis and is created by drawing a line to connect a series of lower highs and another trendline connecting higher lows. It represents a period of consolidation ahead of a breakout or a breakdown.
In this case, a breakout would elevate Bitcoin Cash to a price target of $320. An ongoing bullish momentum suggests that a break above the upper trendline is the most probable. Besides, the Relative Strength Index reinforces the bullish outlook after crossing above the midline.
BCH/USD daily chart
The same daily chart shows Bitcoin Cash trading above all the three Simple Moving Averages; the 50 SMA, 100 SMA, and 200 SMA. The price action above these crucial levels doubles down on the growing bullish grip.
On the other hand, closing the day above $260 might call for more buy orders in readiness for a run-up to $320. Note that delay in recovery may occur at various supply zones, including $270, $280, and $300.
BCH/USD daily chart
IntoTheBlock’s IOMAP model brings to light the ongoing consolidation, especially with the price trading between a massive resistance area and support zone. On the upside, roughly 153,000 addresses are holding approximately 894,000 BCH between $260 and $266.
The supply in this zone could absorb some of the buying pressure. However, if it is flipped into support, a spike might occur towards $300.
On the downside, the immense support holds the ground from $243 to $250. Here, around 111,000 addresses previously purchased, roughly 1.3 million BCH. It is doubtful that the token will slice through this support in the coming sessions to invalidate the uptrend.
Bitcoin Cash IOMAP chart
It is worth mentioning that if Bitcoin Cash closed the day under $260, the breakout to $320 would be jeopardized. Trading below the symmetrical triangle pattern might trigger massive sell orders with enough volume to push BCH under $200.