The entire crypto market is red on May 25 after the Asian session. Some of the top cryptos had made significant losses over the weekend. Bitcoin Cash (BCH) has now bounced off the support level that formed between $220 and $225. It is currently hovering around $228, seemingly getting ready to retest the resistance located at $230.
The crypto, just like most others in the market, extended their bearish action in the weekend session. Before the flash drop, there was a definite attempt to correct above the descending trendline resistance, but the bulls failed. BCH/USD bears are still strong. However, the bulls are still holding onto the 2.62% gains on the day. From the opening value of about $222.85, the price is dancing at $228.
Based on the applied technical indicators, it is highly likely that Bitcoin Cash might bring down the seller congestion located at $230 in the near term. The RSI uptrend from the weekend oversold levels has now stepped above the average.
The continued action towards the overbought would also attract more buyers to join this market. That enhanced with the bullish divergence from the MACD indicates that recovery is in the picture. More upside price movements are expected in the American session.
Looking above, a break past $230 may pave the way for gains towards $240. Additionally, if the descending trendline resistance is overcome, a more significant breakout is expected to close this gap towards $250. On the downside, supports have formed at $225 and $220. Extended losses may test the significant support that has formed at $200.