- Bitcoin Cash’s rally stalled after a slight decline in 24 hours, but bullish signs on its daily chart persisted.
- Large trading volumes jumped 123% in 24 hours, as open interest hit its highest level in two months.
Bitcoin Cash (BCH) was trading at $379 at press time, following a slight decline of 0.58% in 24 hours. Despite the recent decline, BCH is still up around 7% over the past seven days.
On the daily chart, BCH showed several bullish signs. The Moving Average Convergence Divergence (MACD) was above the signal line, suggesting that an uptrend was underway.
The Relative Strength Index at 56 also suggests that buyers slightly outnumbered sellers. However, this line is trending south, which could precede a trend reversal if there is no further increase in buying activity.
Source: TradingView
Bitcoin Cash managed to overturn resistance at the 0.681 Fibonacci level ($370) but failed to sustain gains. If it topples this resistance again and the uptrend continues, the altcoin’s next target will be the 1.618 (420) Fibonacci level.
A review of on-chain metrics suggests this rally is likely, as whale activity increases while network activity increases.
Whale activity and network growth could fuel the rally
Data from IntotheBlock shows that BCH transaction volumes exceeding $100,000 increased to 1.13 million. This represents a 123% increase in just 24 hours.
Source: In the block
Whale activity can be a catalyst for price growth. However, whales only control 16% of BCH supply, suggesting that for the price to rally significantly, retail market interest is also necessary.
At the same time, the Bitcoin Cash network has seen increasing usage. In 24 hours, active addresses increased from 45,000 to 121,000.
An increase in active addresses can fuel the rally as it shows growing interest in a token. If these addresses are actively trading BCH, the price is fixed for volatile movements.
Open interest in Bitcoin Cash increases
BCH open interest recently jumped to $232 million, the highest level in over two months. This increase indicates increased market participation by traders as they open and add to their existing positions on BCH.
Source: Coinglass
Read Bitcoin Cash (BCH) Price Forecast 2024-2025
The rise in open interest rates also coincided with positive funding rates, which reflect an influx of long positions. This highlights the strong belief among derivatives traders that BCH could extend its gains.
Bullish sentiment in the derivatives market, increasing whale activity, and network usage provide bullish arguments in favor of BCH and the likelihood of a rally beyond $400.
