Bitcoin Cash [BCH]: Everything you need to know before writing this alt

by James · October 14, 2022

Shares a statistically significant positive correlation with the leading coin Bitcoin [BTC]Bitcoin Cash [BCH] registered a decrease in price in the last week. According to data from the cryptocurrency analytics platform CoinMarketCapthe price per BCH coin fell by 8% in the last seven days.

Data from Santiment showed that the consistent decline in the price of the asset pointed to BCH distribution by investors.

In addition, the increase in BCH’s trading volume and the lack of a corresponding price increase during the days of October 13 hinted at buyer fatigue. According to CoinMarketCap, BCH’s trading volume had risen by 65% in the last 24 hours.

Source: Sentiment

Sellers “pay out”.

With the last seven days marked by a decline in BCH’s price, buying pressure fell in the last week on a daily chart. As a result, on October 5, the asset’s relative strength index (RSI) and money flow index (MFI) fell below their respective neutral lines to pursue new lows.

At press time, the MFI moved towards the oversold region of 33.41. Following a similar progression, BCH’s RSI rested at 41.79 at press time.

As sellers gradually overran the BCH market, a new bear cycle was initiated on October 10. At press time, the moving average convergence divergence (MACD) made of red histogram bars with an intersection of the MACD line (blue) with the trend line (red) was in a downtrend.

Additionally, a look at the asset’s On-Balance Volume (OBV) confirmed that investors have distributed a lot of BCH since September 9. The indicator has since been on a downward trend, and the price has fallen by 15%.

Source: TradingView

Before writing off the Bitcoin fork

While these key indicators have shown a decline in BCH’s accumulation over the past week, a look at the asset’s Chaikin Money Flow (CMF) revealed a divergence with price.

Facing its falling price, BCH’s CMF rested above the midline to have a positive value of 0.08. This usually represents an increase in buying pressure that usually triggers a rally in the price of an asset.

However, as in the current market, a CMF/price divergence occurs when the price of a cryptoasset trades in the oversold zone while its CMF continues to rise. This is usually taken as a buy signal, so traders looking to move against the market need to take note of this.