Bitcoin Cash (BCH) Technical Analysis: BCH Smart Contracts Proposal Pumping Bulls

There is a wave sweeping through the market, a rejuvenation tide and Bitcoin Cash (BCH) is rising with it. On a weekly basis, it’s up 22 percent and trading above $850, our buy trigger with Bitcoin Cash bulls aiming for $1300 in the short term if not $1800. On the development front, Bitmain’s smart contract proposal will make BCH blockchain superior and boost prices in the long term.

From the News

As a successful Bitcoin core fork, the development of Bitcoin Cash often draws a lot of attention. It even gets better when a company behind one of Bitcoin Cash largest mining pools, Bitmain lays out their proposals. The reasons behind their idea is pretty straight forward and besides offering a means of cash payment and cross border fund transfer, users want some sorts of smart contract capability on top of Bitcoin Cash.

There is Colored Coins, a concept that allows representation of real world assets on the blockchain. While it seems perfect and initially meant for the Bitcoin core network, the implementation of the anti-dust patch prevented it from running. The concept of colored coin depends on micro-transactions well below the specification of the BTC community. Anti-dust prevents the network from being Sybil attacked.

Since is a failure at Bitcoin, Bitcoin Cash community and Bitmain are proposing the use of Omni Layer Protocol, a technology that Tether use. The cool thing about this protocol is that there won’t be changes on the underlying consensus because it simply acts as another layer that runs on top of the Bitcoin Cash blockchain.

Furthermore, through use of Wormhole, smart contracts capabilities will be possible on Bitcoin Cash network. All this is possible because of thanks to the recent Bitcoin Cash hard fork. With this, the Omni Layer protocol will make use of OP_Return transactions and the bigger data-carrier-size which was increased to 220 bytes.

Bitcoin Cash (BCH) Technical Analysis

Weekly Chart

After Stellar Lumens and Cardano—coins which benefited from CoinBase announcements, we have Bitcoin Cash ranking third in terms of performance in the last week. BCH is up 22 percent and what’s even more interesting is where prices are reacting at.

From previous analysis, we note that despite BCH sliding from their ATHs, they were also trending at key support lines.

$600 was one of them but what is standing out as far as price action is concerned is that rejection of lower lows right at the 11 month support trend line. What we have now is a nice bullish engulfing candlestick confirming this three bar bull reversal pattern, the Morning Star.

So, because of this obvious bullish candlestick printing at key support line, it’s obvious that there is a shift of trend and my suggestion is to keep buying on dips.

Daily Chart

Like BTC and the rest of the markets, bull momentum is taking shape and after July 17 and 18 events, our buy trades are live.

Now, not only was there a buy trigger but we also above average volumes meaning buyers are back in trade cementing our long positions.

Ideal buy zones is anywhere between $790 and $850 but you can buy at current spot prices and aim for $1300 and later $1800. Safe stops would be at $750.

Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.

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