Bitcoin Cash rallies over 11% rally in a day, but here’s why bulls should be wary
These days, we don’t hear much about Bitcoin’s red-headed [or rather, green-headed] stepchild Bitcoin Cash [BCH]. However, things changed when the 25th biggest crypto by market cap saw a single-day rally of 11.46%, as well as a weekly rise of 2.55%, bringing its price to $342.94. Many eyes turned to Bitcoin Cash as traders wondered whether the rally would last.
Well, the metrics certainly had a story to tell.
A tale as old as time
Bitcoin Cash is admittedly far below its ATH of $4,355.62. Even so, one rally hints at the possibility of more and traders’ excitement was certainly visible. According to Santiment, there was a spike in active addresses starting from around 10 April, coinciding with BCH’s rally. However, it fell along with BCH’s slight correction.
Another factor that triggered the rally could be that the MVRV Ratio [90 day] for Bitcoin Cash turned positive around 13 April and hit a value of 2.083%. This indicates that – when looking at the 90 day values – BCH holders were, on average, seeing profits.
What about BCH’s price? A look at the Bollinger Bands revealed that the bands were wide apart, indicating upcoming volatility. Adding to that, the candles were still closer to the lower band, signaling a possibly oversold asset. Many bulls would take this as a sign to go shopping.
Just to be sure about the volatility, however, we can look at the Relative Volatility Index [RVI] which clocked in at below 50. This should put bulls on alert as values below 50 point towards sell signals, and further indicate that volatility could take the price downwards.
Fresh ‘cash’ of the day
While investors might not be sure whether Bitcoin Cash will ever cross or even match its former ATH, one individual appears to have a lot of faith in the asset. This was none other than St. Maarten’s MP, Rolando Brison. For those of you trying to remember your geography, St. Maarten is an island in the Caribbean that is considered part of the Netherlands.
Brison was so bullish on crypto – and Bitcoin Cash in particular – that in late March, he reportedly asked for his full salary to be paid in BCH. The MP was quoted as saying,
“Bitcoin Cash is already the most widely accepted cryptocurrency on the island and is increasingly accepted in the Kingdom, the region and the world.”
That being said, the more skeptical amongst us might ask if this is truly a push for broader crypto acceptance or an attempt to boost BCH’s prices once more.