There has been significant sideways fluctuation in the price of bitcoin recently, and it is currently trading in the $16,541 area. However, Bitcoin Cash, a spinoff of BTC, has seen its value drop after passing through the $105 threshold.
BCH may need BTC for a rally, as there is a strong market correlation between the two.
At the time of writing, the token was trading at $102.21, which is far lower than the $126 price range that swiftly rejected any potential bull run. The current market environment is further adding to the unfavorable mood towards BCH.
What Bitcoin Cash Metrics Show
BCH’s price has been steadily decreasing since it was rejected at $165 earlier this year. However, as was previously mentioned, BCH is highly correlated with BTC, which is experiencing strong sideways motion at the present time.
The BCH price may be affected by factors other than correlation. According to CoinGlass, long traders are still active despite the current bearish market sentiment.
As long as investors continue to cling onto Bitcoin Cash, the currency will continue to go sideways.
In addition, position liquidation is rather minimal, coming in at $242,400. In spite of this, the data shows that the vast majority of liquidations are long positions, suggesting that long traders are selling their BCH at a loss.
However, the presence of long traders indicates that the market sentiment is negative but relatively optimistic in the long run. Nonetheless, if the price falls below $99.47, the number of short traders will surely exceed the number of long traders.
BCH: Bearish Market Prognosis
A negative breach of the $99.47 price range might ignite a BCH market sell-off, pushing the price down $88.22.
However, investors and traders should examine BCH’s association with Bitcoin, as the correlation coefficient sits at 0.94 as of this writing.
Current market dynamics indicate a gloomy future for BCH. The last time the present trading range was observed was in 2018. This revisiting of the aforementioned trading range will surely enhance the market’s existing bearish momentum.
With the cryptospace in risk with the FTX’s demise, a bull run in the coming weeks or months is unlikely. As market sentiment remains adverse, this crypto winter would push investors to keep or sell.
Investors and traders could take advantage of BCH’s link with BTC, but if the market scenario deteriorates, they could anticipate further losses in the days to come.
BCH total market cap at $2.03 billion on the daily chart | Featured image from FXLeaders, Chart: TradingView.com