Most altcoins have been consolidating as large crypto investors shy away from the market due to ongoing geopolitical tensions. Bitcoin Cash (BCH) is no exception, with the altcoin being under heavy pressure in recent sessions.
Across the BCH market, sellers have continued to dominate. In fact, at the time of writing, the price had dropped below key EMAs – Weakening the broader market structure.
Momentum favours downside for now
Indicators pointed to further downside risk too. Especially with BCH’s Stochastic RSI falling sharply on the daily chart.
Here, it must be noted that while it seemed to be approaching oversold territory, the altcoin has not fully settled yet. That matters since that could mean the market may not be done correcting.
At the same time, liquidity dynamics have been adding more pressure. For instance – Around $63K worth of liquidity has already been swept in the last 24 hours.
This kind of activity often clears the path for further downside before stability returns.
A fall in institutional interest
There has also been a visible drop in institutional participation. Open Interest declined by roughly $29 million over the aforementioned period.
This may be a sign of reduced confidence among leveraged traders.
When Open Interest drops alongside the price, it usually alludes to positions unwinding, rather than fresh entries. Episodes likes these often weaken bullish momentum even further.
Is a possible turning point ahead?
Despite the bearish setup, however, one signal seemed to be in favour of long-term holders and bulls.
At press time, the altcoin’s Funding Rates were still trailing below 0% – A sign that sellers may be ready to pay more to sustain their short positions.
This shift could mean the market might be nearing a local bottom. In fact, a descending trendline just below the press time price appeared to be acting as a key level.
If buyers step in at that zone, BCH could stabilize on the charts once again.
What is next for BCH?
For now, bears remain in control. At press time, momentum, liquidity sweeps, and declining Open Interest all seemed to lean in their favour.
However, the market might be approaching a critical area soon.
If the trendline holds and buyers return, BCH could attempt a recovery. If not, further downside remains likely before any meaningful bounce.
Final Summary
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BCH dropped below key EMAs as selling pressure gained dominance across the market.
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Falling Open Interest and liquidity sweeps hinted at sustained downside risk, despite some positive indicators
Kelvin Murithi is a crypto journalist and on-chain analyst covering market structure, price action and blockchain data. He is a Bsc. Actuarial Science graduate and harnesses his statistical and data analysis skills to translate complex metrics into clear insights for everyday crypto investors.
