Bitcoin Cash [BCH] saw a minor 0.1% increase, reaching a trading price of $430 at the current time. Despite this small rise, the digital currency dropped by 6.5% over the past week, indicating a bearish trend in the wider cryptocurrency market.
Looking at the charts, bears continued to dictate the price movement of BCH, as evidenced by the Moving Average Convergence Divergence (MACD) indicator. Both the histogram bars and the MACD line showed negativity, signaling bearish momentum.
The recent crossing of the MACD line below the signal line has given rise to another selling indication. Historically, this signal has often led to a significant decline in BCH’s value.
Bitcoin Cash has a strong support level at $417, situated at the lower Bollinger band. If this support level is breached, it could potentially trigger a descent towards the 1.618 Fibonacci level at $365.
Crucial Resistance Level to Monitor
According to the In/Out of the Money Around Price (IOMAP) indicator, there exists a critical resistance zone for BCH within the range of $432 to $445.
More than 429,000 addresses bought the token at these particular price levels. If these holders decide to cut losses, it could amplify the selling pressure on BCH.
Given the substantial losses experienced at this resistance area, buyers may perceive it as an unfavorable entry point, potentially stalling any upward movement.
Increased Bullish Sentiment among Traders
Traders on Binance have displayed a bullish outlook on Bitcoin Cash, despite the negative signals on the daily chart. Currently, 71% of traders have taken long positions on BCH, while short positions make up 28%.
The high number of traders holding long positions indicates a shared belief that BCH could experience gains. However, these long positions could face liquidation in the event of another price plummet, leading to heightened selling pressure.
One contributing factor encouraging long positions is the decline in funding rates to 0.0076% per Coinglass. This decrease suggests that traders are paying less to uphold their open positions.
The one-day chart for Bitcoin Cash highlights prevalent bearish trends. Further, a sell signal on the MACD could drive the price down even more, potentially causing the token to depreciate further.
Despite the positive market sentiment reflected in the Long/Short Ratio, it may not align with price movement in case forced long liquidations follow a significant drop, provoking additional selling activity.