Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
Bitcoin Cashs [BCH] the bullish momentum was halted by critical retracement. A negative funding rate can extend the retrace.
Bitcoin Cashs [BCH] remarkable three-week rally from the $100 low to the $330 high appears to have leveled off in recent days. A major retracement has brought the bullish momentum to a halt after registering more than 200% gains within the aforementioned period.
Read Bitcoin Cash’s [BCH] Price Forecast 2023-24
As of writing, Bitcoin [BTC] had dropped to $30.2k from $31.1k. This left BCH traders faced with a tough decision: look for new long positions based on the retracement or drive the dip to a key support level.
Is this the long awaited retracement for BCH?
Price movements are never linear. While BCH ended its bullish run with a series of higher lows, it was only a matter of time before a significant retracement occurred.
The Visible Range Volume Profile provided insight into where the main price action movements occurred. The Volume Area Low (VAL) and Point of Control (POC) were close at $96 and $120 respectively. However, the Value Area High (VAH) played a key role in the current retracement.
After the price rejected at the $311 resistance level, buyers quickly found support at the VAH ($260) which was close to the $248 support level. This led to a price increase of 23% from this level. Despite this bounce, BCH made another drop towards the $248 support, as of writing.
With the Relative Strength Index (RSI) diving out of the overbought zone and the Moving Average Convergence Divergence (MACD) posting a bearish crossover along with red bars below zero, bullish demand could be waning.
Another positive response from bulls would be if the price reaches the VAH and the confluence of support levels could provide new long opportunities. On the other hand, a break below the level could lead to a deeper retracement with targets of $220 – $200.
Negative Funding Rate Doesn’t Look Good for Bulls
Typically, the funding rate correlates with the medium to long-term trend of the asset. Negative funding rates encourage traders to go short in the futures market. According to Coinalyze, BCH has been posting negative funding rates on the 12-hour time frame since June 27. This could increase the chances of a deeper retracement for BCH.
Realistic or not, here is BCH’s market cap in BTC terms
Similarly, the Spot CVD fell sharply from June 30. This showed that there was more capital outflow than inflow into BCH. Together, it suggested traders proceed with caution over the medium to long term.
This post Bitcoin Cash: Has BCH’s Rally Peaked?
was published first on https://ambcrypto.com/bitcoin-cash-has-bchs-rally-reached-its-zenith/