Bitcoin Cash is up more than 30% this year from its lowest level to date and is close to entering overbought territory. BCH enthusiasts who might worry they’re missing out still have a chance to grab the boat.
The latest bullish relief may have provided some relief for the bears. Zooming out, however, reveals that the latter benefit is rather minuscule compared to the magnitude of BCH’s drawback.
To put it in perspective, Bitcoin Cash needs at least a 10x move to recover within its previous all-time high (ATH) range.
The alt is still trading below the January 2020 level, highlighting the size of the sell-off. It also shows why BCH is still oversold.
It simply means that investors still have a chance at a healthy entry point for the next bullish phase.
While this can be beneficial for long-term HODLers, things are less certain for short-term traders.
Bitcoin Cash Short Term Outlook
BCH’s $130.6 press price as of July 24 is still a long way from the next resistance zone.
However, it has experienced more friction after crossing the 50-day moving average.
BCH showed signs of a sell-off from June 20 to June 23 and this was supported by some outflows, according to the MFI.
However, it continues to show an affinity for the upside, but on-chain stats suggest whales may be anticipating a cooling, especially after the latest rally.
However, it is worth noting that BCH is not oversold yet. So there is a chance that the rally will continue.
Some Bitcoin Cash statistics already point to a potential downside. For example, the supply of whales has decreased significantly in the past 30 days.
Meanwhile, the MVRV ratio did the opposite by climbing. At the time of going to press, it was top notch. This means that many traders who bought the dip are making a profit.
The price increase despite whale outflows suggests the bulls were supported by strong retail demand.
However, the retail buying pressure could not last long without support from larger addresses.
In addition, the 24-hour activity of whale transactions and active addresses has dropped significantly over the past four days.
It is uncharacteristic for whales to buy higher, so they will likely wait for another price drop to buy at a more favorable entry point.
This assumes that retail volume is running out, but many of the buyers in this segment may be long-term investors, driving up the bottom price.
But there are always ups and downs, and the chances of a wave of FUD pushing and wiping out some of the latest gains are also significantly high.
This post Bitcoin Cash Is Oversold, But Here’s How Traders Can Manage Risk
was published first on https://ambcrypto.com/bitcoin-cash-is-oversold-but-heres-how-traders-can-manage-risk/