Bitcoin Cash: What should you do with your BCH?
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Sharing a statistically significant positive correlation with leading coin Bitcoin [BTC], Bitcoin Cash [BCH] saw its price decline in the past week. According to data from cryptocurrency analytics platform CoinMarketCap , the price per BCH coin fell 8% in the last seven days.
Data from Santiment showed that the steady drop in the price of the asset pointed to the distribution of BCH by investors.
Additionally, the surge in BCH trading volume and the lack of a corresponding price rally during intraday trading hours on Oct. 13 hinted at buyer exhaustion. According to CoinMarketCap, BCH trading volume increased by 65% in the last 24 hours.
BCH Seller Gains
With the last seven days marked by a decline in the price of BCH, the buying pressure fell in the last week on a daily chart. As a result, on Oct. 5, the asset's Relative Strength Index (RSI) and Money Flow Index (MFI) fell below their respective neutral lines to seek new lows.
At press time, the IMF inched towards the oversold region at 33.41. Following a similar progression, BCH's RSI rested at 41.79 at press time.
As sellers gradually invaded the BCH market, a new bearish cycle began on Oct. 10. At press time, the moving average convergence divergence (MACD) was made up of red histogram bars with an intersection of the MACD line (blue) with the trend line (red) in a downtrend.
Additionally, a look at the asset's on-balance sheet volume (OBV) confirmed that investors have distributed BCH heavily since Sept. 9. Since then, the indicator has been trending down and the price has fallen by 15%.
BCH may be trending up
While these key indicators have shown a decline in BCH accumulation in the past week, a look at the asset's Chaikin Money Flow (CMF) revealed a divergence with its price.
Faced with the fall in its price, the CMF of BCH remained above the central line to register a positive value of 0.08. This generally represents an increase in buying pressure that usually precipitates a rally in an asset's price.
However, like in the current market, a CMF/price divergence occurs when the price of a crypto asset trades in the oversold zone while its CMF continues to rise. This is generally taken as a buy signal, so traders looking to move against the market should take note of this.
Oct 15, 2022