Bitcoin Cash's Relative Strength Index has hit 25, a level that often signals an asset is oversold. Technical indicators now point to a short-term bounce toward the $365 resistance mark within the next 48 hours. But that recovery is expected to be brief, with a deeper drop to $290 forecast once the counter-trend rally runs out of steam.
Oversold Reading Puts BCH in Focus
The RSI, a momentum oscillator that measures the speed and change of price movements, dipped to 25 on Thursday. Readings below 30 are typically considered oversold, suggesting selling pressure may be exhausted in the near term. Traders watching the chart see a bounce to $365 as the most likely immediate move, given past patterns at similar RSI levels.
Why the Bounce Isn't Likely to Hold
The projected rally to $365 is viewed as a counter-trend move rather than the start of a sustained recovery. Once that resistance is tested, the price is expected to reverse and break down sharply. The next target after that failure sits at $290, a level that would represent a significant loss from current prices. The move lower could be rapid, as stop-loss orders accumulate below key support.
The setup mirrors classic oversold bounces that fail when broader bearish momentum reasserts itself. Without a catalyst strong enough to shift sentiment, the relief rally may attract sellers looking to offload positions at higher prices.
The question now is whether buying pressure can push BCH through $365 before sellers step in. The next two days will determine if the bounce has enough force to challenge resistance or if the breakdown to $290 begins earlier than expected.
