Bitcoin Cash (BCH) experienced a notable increase of 4% on Friday, building on the previous day’s gains of 3.51%. This surge is largely attributed to a decline in inflation within the United States, which has prompted renewed retail interest in the cryptocurrency market. As BCH approaches a critical price level, many investors are watching closely for a potential breakout above $600.
The momentum for Bitcoin Cash has been bolstered by the latest consumer price index (CPI) data, which reported an inflation rate of 2.7% for November. This figure has contributed to a positive market sentiment, overshadowing the recent quarter-point interest rate hike by the Bank of Japan, which raised its rate to 0.75%, the highest level in three decades.
Data from CoinGlass indicates a significant uptick in retail engagement, with BCH futures Open Interest reaching a six-month high of $761.48 million. This marks an 18.69% rise in the last 24 hours, reflecting a growing risk-on sentiment among traders. The funding rate for BCH futures has also shifted positively, now standing at 0.0016%, up from -0.154% earlier in the day, suggesting a resurgence of bullish interest in the market.
Technical Analysis: Eyeing the $600 Breakout
The technical outlook for Bitcoin Cash remains optimistic. Currently, BCH is trading above both the 50-period and 200-period Exponential Moving Averages on the 4-hour chart. Following a double-bottom reversal from the $530 mark, BCH is now aiming for a bullish close above the R1 Pivot Point at $591. If successful, this could pave the way for a rally towards the $625 target.
Indicators on the 4-hour chart suggest increasing bullish pressure. The Relative Strength Index (RSI) is currently at 64, nearing the overbought territory, while the Moving Average Convergence Divergence (MACD) has crossed into positive territory, supported by rising green histogram bars. This technical setup indicates that traders are positioning themselves for a possible upward movement.
Should Bitcoin Cash fail to maintain momentum and cross the $600 threshold, a potential retest of the 50-period EMA at $560 could occur. This scenario underscores the importance of the $600 level as a critical resistance point for BCH.
The rising retail interest in Bitcoin Cash is a significant factor driving its current price action. As more investors enter the market, eyes will remain fixed on how BCH performs against the backdrop of broader economic indicators and market sentiment. As the situation develops, traders will be keen to see if BCH can sustain its upward trajectory and achieve the anticipated breakout.
