Bitcoin Cash (BCH) has experienced a remarkable 21% surge in recent trading sessions, drawing the attention of both traders and investors. At press time, the price of BCH stands at $387, inching closer to the critical $400 level. This upward movement signals a potential shift in market structure, but resistance remains ahead, leaving many questioning whether the surge will hold or fade.

A Potential Bullish Structure Shift

Bitcoin Cash’s recent price action suggests that the asset may be on the verge of a bullish market structure shift. If BCH manages to close above $351 on the daily chart, it would confirm a transition to a more positive trend. As of now, the price is hovering just under this threshold, at $387, suggesting that a bullish shift could be imminent.

The surge in price is largely supported by strong demand in the market, which has coincided with a broader upward movement in Bitcoin (BTC). In fact, Bitcoin Cash’s correlation with major cryptocurrencies such as Bitcoin, Dogecoin (DOGE), and Chainlink (LINK) has been notable, with BCH displaying a +0.8 correlation with DOGE and a +0.71 correlation with BTC.

The price action in the last few hours has been accompanied by strong demand, further supporting the possibility of BCH reclaiming the psychological $400 level. If BCH manages to close the day above $351, it would mark a pivotal moment for the coin, potentially confirming a shift in its market trajectory.

Key Resistance Zone: $400 and Beyond

Despite the promising signs of bullish momentum, Bitcoin Cash faces significant resistance in the $408-$422 range. The In/Out of the Money data shows that this zone holds considerable selling pressure, with many traders likely to look for short opportunities in this price range.

Additionally, the area near $425 is identified as a key resistance level, which may limit BCH’s ability to sustain the current upward trend. This zone is also near the 61.8% Fibonacci retracement level, which often acts as a psychological barrier in technical analysis.

The $400 level, while a crucial psychological level, also represents a lower low made in January, and it marks a key point where BCH may face resistance. Traders will be closely watching for price reactions at these levels to gauge whether the rally will continue or if a pullback is imminent.

Support Levels: $329-$342

On the downside, Bitcoin Cash has established firm support between the $329 and $342 range, where a significant amount of purchasing volume was recorded. This support zone is expected to hold firm if BCH experiences a price pullback, providing a cushion for the coin should the broader market shift bearish.

If BCH revisits this support area, it may find buying interest, which could allow the price to rebound and challenge the $400 level once again. However, a breakdown below the support zone at $329-$342 could signal a deeper correction, leading the price toward more significant downside targets.

Short-Term Outlook and Risk-Reward Setup

For traders looking to capitalize on the current price action, the $414-$425 range offers a solid risk-reward area for short entries. Given the bearish swing structure that still dominates the overall market, a rejection from this zone could lead to price declines. As such, the $414-$425 range is seen as a prime level for shorting BCH, given the high likelihood of a reversal.

That said, a breakout above the $452 mark would invalidate the bearish argument and shift the momentum back in favor of the bulls. If BCH can break above this level and hold above it, the next target would be the $500 region, which would mark a significant breakout from its current range.

Conclusion

Bitcoin Cash’s recent 21% surge has brought the coin closer to key resistance levels, particularly around the $400 mark. While the market structure shows potential for a bullish shift, BCH must overcome significant resistance before confirming a sustained upward trend. Traders should watch for price reactions around the $400-$425 range to determine the next move for Bitcoin Cash. Should the price break through resistance, a more substantial rally could follow. However, if BCH fails to sustain its upward momentum, a pullback to key support levels remains a possibility.