With Bitcoin Cash node upgrade nearby, gauging the impact on BCH shorts
- While Bitcoin Cash got Binance’s support for the upgrade, traders were bearish.
- Active addresses on the network have increased over the last week.
As the Bitcoin Cash [BCH] community eagerly awaited the deployment of node v26.0.0, the dominance of shorts in the derivatives market continued to prevail. The upgrade, announced in January, was the project’s 10th network polishing since the first in November 2017.
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According to the specifications, there would be four major changes on the Bitcoin Cash “chipnet” test network. The decentralized peer-to-peer electronic cash network had mentioned that the release of the node version would focus more on the interface with more corrections and improvements, rather than the consensus.
Exchange support hasn’t deterred traders’ bias
Interestingly, Binance had also drummed up support for the upgrade via its announcement on 9 May. Despite this positive development, the market sentiment surrounding BCH skewed toward short positions, as indicated by the funding rate.
As of this writing, the funding rate was -0.002%. When the metric is in the positive region, it means that longs were willing to pay shorts to hold their postions. But in a case like the current one, it implies that shorts had kept their contracts open and pay longs.
Furthermore, the overall market dynamics seemed to have changed for the cryptocurrency as the upgrade nears its activation. On 13 May, the outlook toward BCH from a sentiment angle was positive.
However, the weighted sentiment at press time had retraced to the negative region, with the value at -0.607. As seen from the chart above, the metric decline implied that the viewpoint toward BCH’s price action was gloomy apart from the action taken by futures and options and traders.
Stability in the spread
Although the price had lost 14.41% of its value in the 30-day timeframe, it seems to have stabilized over the last 24 hours.
In terms of the Market Value to Realized Value (MVRV) ratio Z score, Santiment revealed that it was -0.413. The metric is based on the difference between the realized value and the market value of an asset.
Negative values mean that short-term holders had realized more profits than long-term faithful. But in the current cycle, the metric condition indicates that BCH was closer to its top than the bottom.
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Meanwhile, active addresses on the network have been increasing over the past seven days. At the time of writing, the metric, which depicts the level of crowd interaction, had increased to 311,00.
In conclusion, the node upgrade will be deployed on the Mainnet on 15 May at 12:00:00 UTC.