At 1130 GMT, the BCH/USD pair was trading at $129.83 according to aggregated data provided by CoinGecko.com. The total market cap, at the same time, was close to $2.282 billion, Bitcoin Cash’s best since January 15, 2019, while its 24-hour adjusted volume was above $256.244 million.
In comparison, other top cryptocurrencies underperformed. While Bitcoin’s valued surged by a modest 2%, XRP and Ethereum also jumped 1.6% and 2.2% on a 24-hour adjusted timeframe. Only EOS and Tron came closer to Bitcoin Cash concerning substantial gains. Both the blockchain assets appreciated more than 5% against the dollar.
No Solid Fundamentals
The Bitcoin Cash market could not provide any evidence that could support their impressive rally. Roger Ver, the man behind the Bitcoin Cash project, had recently announced that they would update their Bitcoin.com wallet. On January 21, peer-to-peer marketplace Bitquick had added BCH support to its platform. But the rally did not start anytime before January 22.
On the contrary, Bitcoin Cash faced survival threats throughout the time since its hard fork in November 2018. Its closest ally Bitmain closed down global operations, fired 80% of its staff, and replaced its two CEOs in what it called an adjustment. Cobra, the co-owner of bitcoin.org and bitcointalk.org, said in a controversial tweet that Bitcoin Cash is dead.
The absence of solid fundamentals left technical indicators to do the explanation.
As visible in the Coinbase chart above, the Bitcoin Cash surge took place merely around its current support area near $119.64. Similarly, an active resistance area to the upside capped the rally from maturing further – as it did in four different occasions since January 17. It explains that Bitcoin Cash – at best – must be consolidating within a strict trading channel while awaiting breakout.
According to Moon Overlord, a cryptocurrency trader with 38.8k followers on Twitter, Bitcoin Cash is breaking out of a sizeable descending trend line.
Nico, another Bitcoin Cash analyst, found the coin breaking out of a falling wedge pattern. Traditionally, such a move is bullish for assets.
“MACD and RSI rising, Buy Signal from the UCTS at the 6h chart,” wrote Nico. “EMA50-100 & 200 between here and potential target at 0.04sats so pay attention for any pullback in the road.”