- Bitcoin Cash price has jumped by more than 20% from its lowest level last week.
- The rally happened as Bitcoin jumped above $27,000 on Monday.
- BCH has formed a small double-top pattern on the 4H chart.
Bitcoin Cash price continued rising as the cryptocurrency rebound gained steam. The BCH coin jumped to a high $225.62, the highest level since August 29th. It has soared by more than 20% from the lowest level this month.
Bitcoin price rebounds
The main reason why Bitcoin Cash and other cryptocurrency prices bounced back was that BTC rose above $27,000 on Monday. This was a spectacular recovery since the coin plunged below $25,000 last week.
Historically, cryptocurrencies like BCH, Litecoin, Cardano, and Chainlink tend to do well when Bitcoin is rising.
There was no major direct catalyst for this move. Instead, I believe that the rally was because of the upcoming Federal Reserve decision, which I wrote about here. Most analysts believe that the Fed will pause its interest rates hikes this week.
A case for hiking can be made. First, the United Auto Workers (UAW) union has called one of the biggest strikes in the US. It is unclear when the strike will end since the union has pledged to go on as long as it takes.
Economists believe that the strike will knock off over 0.2% of the GDP if it goes on for more than a month. Second, there are still rising risks about supply chains as a major traffic jam continues in Panama.
Further, millions of people with student loans will start paying it back in October. On average, these people will start paying between $200 and $300. In all, they are expected to pay over $100 billion in the first year and affect consumer spending.
Still, a pause will likely be hawkish in nature since inflation is rising again. The headline consumer price index (CPI) rose to 3.7% in August as gasoline prices jumped. Now, with Brent crude oil price trading at $94, there is a likelihood that prices will continue soaring.
Bitcoin Cash price forecast
The 4H chart shows that the BCH price has made a strong recovery in the past few days. This recovery peaked at $225.20 on Monday. This was an important level since it was also the highest point on Sunday and on August 29th. It has formed a small double-top pattern, which is usually a bearish sign.
On the other hand, it has formed a cup and handle pattern and remains above the 25-day and 50-day moving averages. Therefore, more gains will be confirmed if Bitcoin Cash price rises above double-top level of $225.20. If this happens, the next level to watch will be at $236.77, the highest point on August 15th.
