The Bitcoin Cash price is in a freefall today as investors react to the ongoing cryptocurrency sell-off. The BCH price is trading at $580, which is more than 10% below the highest point yesterday and 64% below the highest level this year. The coin has a market cap of more than $10.8 billion and is the 12th biggest cryptocurrency in the world.
What happened: Cryptocurrencies are selling-off as investors brace for tighter regulations and relatively high interest rates in the United States. Bitcoin has dropped to $33,000 while Ethereum and Cardano have dropped by more than 10% in the past 24 hours. At the same time, the total market cap of cryptocurrencies has dropped by more than 12% in the past 24 hours.
Bitcoin Cash is often viewed as a proxy for Bitcoin because of their close relationship. Therefore, since Bitcoin Cash price is usually significantly lower than that of BTC, many retail traders usually prefer the former. As such, during a sell-off, the BCH tends to be more volatile than the BTC.
The BCH price is also falling because of the upcoming inflation data that will come out on Thursday. If the numbers are better than expected, it will raise the possibility that the Fed will turn hawkish. This, in turn, will likely push cryptocurrency prices lower. So, what next for the Bitcoin Cash price?
In a report on Bitcoin yesterday, I warned that the BTC was about to have a major bearish breakout. I pointed to the fact that the coin was forming a bearish pennant pattern on the four-hour chart. A similar pattern happened on the BCH price.
As shown on the four-hour chart, we see that the coin broke out below the lower line of the descending triangle in the Asian session. This is a sign that bears are prevailing. The coin is also below the 25-day and 15-day exponential moving averages.
Therefore, after the volume-supported bearish breakout today, we can’t rule out a situation where the price drops to the lowest level in March at $466. On the flip side, a move above $675 will invalidate this outlook.
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