The Bitcoin Cash price is attempting to bounce back after it declined to its lowest level in almost two weeks yesterday. BCH is trading at $1,125, which is 13.80% above the lowest level on Monday. It has a market capitalization of more than $21 billion and is the tenth largest digital currency in the world. It sits between Internet Computer and Litecoin.
What happened: Bitcoin Cash is a digital asset that tends to track the price of Bitcoin. After staging a major rally this week, Bitcoin Cash has declined by more than 32% from its YTD high. This decline is mostly because of the overall weakness of the cryptocurrency industry where most currencies have retreated. Indeed, Bitcoin price has dropped from its all-time high of almost $65,000 to the current $45,000.
There are three primary reasons for this. First, Elon Musk’s tweets on Bitcoin have led to significant volatility as investors assess whether Tesla is about to sell the currency. Second, worries of potential interest rate hikes remain after the recent spike in inflation. Finally, there are worries about Tether, the biggest stablecoin in the world. This is after the firm disclosed that it held less than 3% of cash reserves instead of 100%.
The four-hour chart does not look good for Bitcoin Cash bulls. The chart shows that the BCH formed a double-top pattern close to its highest level this year. This is usually a bearish signal. At the same time, the currency managed to move below the neckline of this pattern.
It has also declined below the 50-day and 25-day exponential moving averages (EMA), which is another bearish signal. The currency also seems to be forming a bearish flag pattern. Therefore, we can’t rule out further declines in the near term. This could push the BCH below $1,000.
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