Bitcoin Cash has extended Tuesday’s gains as Bitcoin and other altcoins exhibit a similar trend. On Monday, the risk-off sentiment triggered a plunge among cryptocurrencies and other financial assets. The fear was largely as a result of the aggressive spreading of the Delta coronavirus variant.
Bitcoin, the leading crypto by way of market capitalization dropped from an intraday high of 31,943.31 on Monday to trade below the crucial level of 30,000 at 29,297.64 on Tuesday. During the same timeframe, Bitcoin Cash fell from 441.76 to 384.72.
In addition to the regulatory pressures that have been weighing on cryptocurrencies, inflation concerns and COVID-19 are key drivers of the bearish outlook. On Wednesday, the fear and freed index remains on the fear side of the spectrum at 23. In the previous session, it closed at 20, which is lower than last week’s 34.
Based on both the fundamentals and technicals, Bitcoin Cash current rally could be a dead cat bounce. The pattern, which is also referred to as a relief rally, occurs when a financial asset recovers temporarily before reviving its downward momentum.
Bitcoin Cash is up by 6.16% at 423.22. Notably, it has erased most of the week’s losses when the crypto dropped from a high of 441.76. It is currently finding support along the 50-day EMA at 421.10. However, it remains below the 200-day EMA.
To rule out the narrative of a relief rally, the bulls may need to gather enough momentum to push the prices past the 200-day EMA at last week’s support-turn-resistance level of 458.65. In the near term, it may find resistance at 443.96.
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