The Bitcoin Cash price has been under intense pressure in the past few months as demand for the coin wanes. The BCH token is trading at $367, which is its lowest level since December 4th. It has crashed by over 77% from its highest level last year.
Bitcoin Cash price has tumbled at a time when the crypto fear and greed index has dropped to the extreme fear zone of 21. This was the lowest level it has been in over five months.
There are two main reasons why the BCH price has lagged recently. First, there is fear that the Federal Reserve will embrace a more hawkish tone in the coming months as runaway inflation gets underway. The bank will end its quantitative easing program this quarter and then start a gradual pace of interest rates. Indeed, bond yields in the United States and other countries like the UK have been rising as investors anticipate this tightening.
Second, the Bitcoin Cash price has tumbled as investors remain concerned about its demand. The worries stem from the fact that Bitcoin Cash has lost its correlation with Bitcoin. For example, while it has crashed by 77% from its 2021 high, Bitcoin has declined by about 40%. Finally, on-chain data shows that activity in the Bitcoin Cash ecosystem has been limited recently.
The daily chart below shows that the BCH price has been in a deep downward trend lately. The chart shows that it reached a key support level at $353 on Monday. It has also remained below the key level at $470, which was the lowest level on September 21st.
The Bitcoin Cash price has also moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has been in a bearish trend. Therefore, with the BCH coin hanging on a balance, there is a possibility that bears will prevail. If this happens, the next key level to watch will be at $300. A move above the resistance at $400 will invalidate the bearish view.
This post was last modified on Jan 11, 2022, 04:48 GMT 04:48