Bitcoin Cash (BCH), a spin-off of the original Bitcoin blockchain, is showing signs of weakness as it struggles to break above a key resistance level. The cryptocurrency’s price has been repeatedly rejected by the 50-week Exponential Moving Average (EMA) of around $350.2, a technical indicator often used to gauge long-term trends.
On-chain data further supports a bearish outlook for BCH. The OI-Weighted Funding Rate, a metric that measures the sentiment of market participants, is currently negative. This suggests that there is a prevailing bearish sentiment among traders, which could put downward pressure on the price.
If BCH fails to close above the $280.6 support level and breaks below the ascending trendline that has been in place since early June 2023, it could experience a significant decline, potentially falling by as much as 23% to retest the December 11, 2023, weekly low of $210.1.
Technical indicators such as the Relative Strength Index (RSI) and the Awesome Oscillator (AO) have also turned bearish, indicating that the momentum is currently favoring sellers.
However, there is still a possibility of a bullish reversal. If BCH can break above the 50-week EMA and close above the $378 weekly resistance level, it could signal a change in sentiment and lead to a rally of up to 19%.
In conclusion, Bitcoin Cash is facing a challenging period, with the technical indicators and on-chain data suggesting a potential downward trajectory. While there is always the possibility of a bullish reversal, investors should be cautious and monitor the situation closely.
