Bitcoin Cash Price Rises as On-Chain Data Suggests Growth Potential
Bitcoin Cash (BCH) has risen 2% today, building on a recent 6% surge. Key metrics indicate bullish momentum, including favorable MVRV data and increased Open Interest in derivatives. BCH is approaching significant resistance levels, reflecting a positive sentiment in the crypto market, although caution is advised as prices could face downward pressure if certain thresholds are not maintained.
Bitcoin Cash (BCH) is seeing a notable 2% increase on Thursday, compounding on a solid 6.39% rise observed the previous day. This upward movement has stepped inside a parallel channel pattern and appears to build toward hitting the symbolic $500 level. Furthermore, on-chain metrics, particularly the Market Value to Realized Value (MVRV) data, suggest there is still potential for BCH to climb before it approaches a significant reversal point.
The MVRV indicator from Santiment highlights how the average profit or loss for BCH investors stands at a ratio of 0.665. This suggests that many investors are still in the black, yet previous spikes to 0.729 have often led to profit-taking phases. Given that BCH has not yet hit the ratio that typically signals sell-offs, there remains scope for further price increases ahead of any likely profit bookings.
The enthusiasm does not stop there; as noted by CoinGlass, Open Interest (OI) in Bitcoin Cash has surged over 7%, now sitting at approximately $471.99 million. What this indicates is a inflow of funds into the derivatives market spurred by bullish buying trends. Additionally, the positive OI-weighted funding rate at 0.0014% shows that buy-side action is outpacing shorts right now, reinforcing optimistic expectations for BCH’s price trajectory.
In technical terms, Bitcoin Cash is aiming to break through an important resistance level, having printed two bullish candles in a row. Currently, BCH is getting close to its year-to-date high of $505, which aligns with a steadily rising trendline based on past peak values. Meanwhile, a parallel support trendline exists due to earlier swing lows, confirming the rising channel pattern in play.
From a technical analysis viewpoint, crossing the 61.8% Fibonacci retracement level at $490 would be a crucial milestone for BCH. Should it close above this threshold, it might pave the way for further recovery towards the next Fibonacci level at 78.6%, pegged at around $556. It’s also interesting to note that the Moving Average Convergence/Divergence (MACD) indicator remains above the signal line, implying ongoing buying momentum.
However, it is not all smooth sailing. Should Bitcoin Cash fail to maintain momentum and stumble below the 61.8% Fibonacci level, a retest of the lower boundary around $450 could be on the horizon. As always, investors should approach any trading decisions with caution, considering the inherent risks in the volatile cryptocurrency market.
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In summary, Bitcoin Cash is on an upward trajectory, currently trading around $490, with metrics suggesting potential for further gains. An uptick in Open Interest and favorable MVRV data supports this bullish outlook. However, traders should remain mindful of possible price corrections, particularly if crucial Fibonacci levels are breached. Overall, despite market risks, the sentiment surrounding Bitcoin Cash appears optimistic in the short term.
Original Source: www.fxstreet.com
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