- The Bitcoin Cash rally stalled after a slight decline in 24 hours, but the bullish signs on the one-day chart remained.
- High transaction volumes rose 123% in 24 hours after open interest hit a two-month high.
Bitcoin cash [BCH] was trading at $379 at the time of writing, after a slight decline of 0.58% in 24 hours. Despite the recent decline, BCH is still up about 7% over the past seven days.
On the one-day chart, BCH showed several bullish signals. The Moving Average Convergence Divergence (MACD) was above the signal line, indicating an uptrend is underway.
The Relative Strength Index of 56 also suggested there were slightly more buyers than sellers. However, this line is tilting south, which could precede a trend reversal if there is no new uptick in buying activity.
Source: TradingView
Bitcoin Cash managed to clear resistance at the Fibonacci level of 0.681 ($370), but failed to maintain gains. If this resistance is reversed again and the uptrend continues, the next target for the altcoin will be the Fibonacci level of 1,618 (420).
A look at the on-chain metrics suggests that this rally is likely because whale activity is increasing while network activity is increasing.
Whale activity and network growth could fuel the rally
Data from IntotheBlock shows that volumes for BCH transactions over $100,000 increased to 1.13 million. This represents an increase of 123% in just 24 hours.
Source: IntoTheBlock
Whale activity can be a catalyst for price growth. However, whales only hold 16% of BCH’s supply, suggesting that interest from the retail market is also needed for the price to recover significantly.
At the same time, the Bitcoin Cash network has experienced increased usage. Within 24 hours, the active addresses increased from 45,000 to 121,000.
An increase in the number of active addresses can fuel the rally as it shows increasing interest in a token. If these addresses are actively trading BCH, the price will be set on volatile movements.
Bitcoin Cash open interest rises
BCH’s open interest recently rose to $232 million, the highest level in more than two months. This increase points toward increasing market participation from traders as they open and expand their existing positions on BCH.
Source: Coinglass
Read the one from Bitcoin Cash [BCH] Price forecast 2024–2025
Rising open rates also coincided with positive funding rates, indicating an influx of long positions. This underlines the strong belief among derivatives traders that BCH could grow its profits.
Bullish sentiment in the derivatives market, rising whale activity and network usage make a bullish case for BCH and the likelihood of a rally above $400.
