Amid a significant recovery in the digital currency market, Bitcoin Cash [BCH] is currently attracting considerable interest from traders and investors owing to its impressive performance.
The overall sentiment surrounding BCH has transitioned from a downward trend to an upward trajectory, as the token recently breached a critical resistance level and is now positioned for a substantial upward momentum.
Bitcoin Cash Technical Overview
Based on the technical analysis provided by CryptoCrypto, BCH appears to exhibit bullish signs following the breakout from its resistance level.
Upon inspecting the daily chart, it is evident that the token has tested this resistance on three occasions, but due to the bullish market sentiment preceding the presidential election, it managed to surpass it with a significant engulfing candle.
Moreover, this robust bullish candle concluded above the 200-day Exponential Moving Average (EMA), indicating a shift in the upward trend.
Following this breakout, there are currently no barriers or resistance levels on the daily chart. Analyzing past price movements, BCH has a high potential to surge by 18% to attain the $450 mark in the upcoming days.
Despite this optimistic outlook, the 16% candle of BCH could lead to a period of price consolidation near the breakout zone before a notable rally ensues.
BCH’s Positive On-Chain Indicators
Further reinforcing BCH’s favorable outlook are its on-chain metrics. According to Coinglass, an on-chain analytics firm, BCH’s Long/Short ratio over a four-hour timeframe stood at 1.20, reflecting strong bullish sentiment.
In addition, its Futures Open Interest has surged by 30% in the last 24 hours. This rise implies that traders have heightened faith in BCH and might be inclined towards more long positions.
Traders and investors often look for a blend of increasing Open Interest and a Long/Short Ratio exceeding 1 when establishing long positions.
This indicates that bulls are in control of the asset and could initiate a substantial upward movement. Currently, 54.5% of top traders have opened long positions, while 45.5% have taken short positions.
Key Liquidation Levels
Presently, the primary liquidation point on the downside is at $361, where bulls are overly leveraged. If the sentiment shifts and the price dips below this level, approximately $4.23 million worth of long positions could be liquidated.
Conversely, $374.4 represents a crucial liquidation level on the upside, where bears are excessively leveraged. If the sentiment remains constant and the price exceeds this threshold, around $603,680 worth of short positions might face liquidation.
This data on liquidation indicates that the bets for bullish positions significantly outweigh the short positions taken by bears.
Current Price Momentum
At the time of publication, BCH was exchanging hands near $370.5 following a price surge of more than 12.75% in the past 24 hours.
During the same period, its trading volume spiked by 218%, showing increased involvement from traders and investors, likely fueled by the recent breakout.