What next as Bitcoin Cash drops below $300?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- BCH failed to reclaim the $300 psychological level.
- The Open Interest rates eased below $500 million.
Bitcoin Cash’s [BCH] wild rally seen at the end of June was dissipating slowly. The altcoin has struggled to secure a daily candlestick session close above $300 since 2 July to no avail. At the time of writing, bulls thronged the $261 support to prevent the pullback from morphing into a downtrend.
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Similarly, Bitcoin [BTC] bulls seem fixated on not letting the King coin slide below $30k. BTC has been oscillating between $30k – $31.5k for about three weeks (since 22 June). Whether Bitcoin Cash will follow BTC’s cue and chalk a range-bound extension was unclear.
Will the $261 support remain steady?
The $261 support was significant because it was also a safe landing for bulls in Q1 2022. So, bulls could be adamant about letting go, lest they expose recent gains to likely losses. The technical indicators also signaled that bulls still had the upper hand.
For example, the Relative Strength Index eased slightly but was still within the overbought territory. Similarly, the On Balance Volume was still edging higher, albeit sluggishly, reinforcing buying pressure, and demand remained.
So, BCH bulls could attempt to reclaim or clear the recent high of $329, but they’ll have to close above $300 to realize their targets.
The first sign of worry for BCH bulls will be a crack of the $261 support. Such a scenario could expose BCH to likely losses and devaluation towards $222.
How much are 1,10,100 BCH worth today?
Open Interest rates eased below $500 million
The demand for BCH in the futures market recently faltered, further undermining further uptrend momentum. Notably, the Open Interest (OI) rates hit above $500 million at the end of June/early July.
After that, the OI dropped below $500 million, suggesting demand stagnated amidst BTC consolidation above $30k. A cross above $500 million will likely entice bulls to target $300, but only if BTC surges above $30k. Hence, worth tracking BTC price action.