Bitcoin Cash (BCH) has surged by 71% over the past month, reaching a high of $574, marking a significant increase from the $6.6 billion to $11.3 billion in market capitalization. This uptrend reflects the broader gains seen across the alternative coin market.
The ongoing rally of Bitcoin Cash is gaining strength as it operates within an upward parallel channel, signaling a sustained bullish trajectory.
Presently, BCH is challenging the resistance level at the upper border of the channel, although trading volumes appear relatively low, as evidenced by the volume bars on the histogram, prompting concerns about a potential breakout.
With the Stochastic Relative Strength Index (RSI) at 85, indicating an overbought scenario for BCH, the continuous upward movement above the signal line implies that the bullish momentum is still intact.
Historically, an overbought Stoch RSI hasn’t consistently led to price corrections, suggesting that the rally might continue.
The Moving Average Convergence Divergence (MACD) also indicates a bullish trend with an expanding gap over the signal line, further supporting the positive momentum.
These optimistic indicators suggest a sustained upward trend for Bitcoin Cash. However, breaking past the ascending channel boundary and surpassing $600 would require an upsurge in buying activities.
Are Large Bitcoin Cash Investors Joining the Rally?
Recent data from IntoTheBlock reveals a surge in whale activity within the Bitcoin Cash network, with significant transactions climbing from 506,210 BCH to 1.25M BCH.
These whales, constituting 16.71% of BCH’s total supply, likely indicate increased buying interest, evident from the positive shift in large holders’ netflows, signaling strong buying activity among this group.
Accumulation by these influential addresses could potentially bolster Bitcoin Cash’s bullish drive, paving the way for further price increases.
Signs of Enhanced Involvement in the Derivatives Market…
Besides the heightened whale interest, the derivatives market is also showcasing a positive outlook with a surge in demand for BCH futures contracts.
On December 4th, BCH’s Open Interest spiked to $407M, marking its highest level in over seven months.
This uptick in Bitcoin Cash’s Open Interest is significant, almost on par with Tron (TRX), which currently stands at $438M despite TRX having a market cap three times larger than BCH.
The increasing engagement from the market participants bodes well for Bitcoin Cash. The Long/Short Ratio indicates a preference for long positions among most traders.
As observed on Binance, 74% of traders holding open BCH futures positions are taking long positions, signaling a prevailing bullish sentiment. Moreover, the Long/Short Ratio for BCH on Binance has surged to a monthly peak of 2.92.