Bitcoin Cash rallies over 11% rally in a day, but here’s why bulls should be wary
These days, we don’t hear much about Bitcoin’s red-headed [or rather, green-headed] stepchild Bitcoin Cash [BCH]. However, things changed when the 25th biggest crypto by market cap saw a single-day rally of 11.46%, as well as a weekly rise of 2.55%, bringing its price to $342.94. Many eyes turned to Bitcoin Cash as traders wondered whether the rally would last.
Well, the metrics certainly had a story to tell.
Bitcoin Cash is admittedly far below its ATH of $4,355.62. Even so, one rally hints at the possibility of more and traders’ excitement was certainly visible. According to Santiment, there was a spike in active addresses starting from around 10 April, coinciding with BCH’s rally. However, it fell along with BCH’s slight correction.
Source: Santiment
Another factor that triggered the rally could be that the MVRV Ratio [90 day] for Bitcoin Cash turned positive around 13 April and hit a value of 2.083%. This indicates that – when looking at the 90 day values – BCH holders were, on average, seeing profits.
Source: Santiment
What about BCH’s price? A look at the Bollinger Bands revealed that the bands were wide apart, indicating upcoming volatility. Adding to that, the candles were still closer to the lower band, signaling a possibly oversold asset. Many bulls would take this as a sign to go shopping.
Source: Trading View
Just to be sure about the volatility, however, we can look at the Relative Volatility Index [RVI] which clocked in at below 50. This should put bulls on alert as values below 50 point towards sell signals, and further indicate that volatility could take the price downwards.
Source: Trading View
While investors might not be sure whether Bitcoin Cash will ever cross or even match its former ATH, one individual
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