Bitcoin Cash (BCH) just became one of the biggest gainers in the last 24 hours in a surprising turn of events.
This was courtesy of an impressive upside in the last 2 days which allowed it to overcome the overall downward trend in the market.
Bitcoin Cash briefly secured the the top gainer spot after bouncing from a $446 low on Friday, to a $565 price high on the next day. An impressive 26% surge within less than 24 hours.
The Bitcoin Cash rally surprisingly occurred as the rest of the market extended its downside.
However, it retreated to a $549 press time price tag, which meant price was on track to conclude the week in the green by more than 12%.
A deeper look at the BCH price action especially over longer-term duration revealed something interesting. Its price action actually surged by 0.78% in the last 4 weeks.
In other words, its defiance against the bear was not just evident this week but BCH price appeared to be immune form the wave of sell pressure in the last 3 months.
Is Bitcoin Cash Price Action on the Verge of More Upside?
The big question now is whether BCH price will maintain the same defiance. Most top cryptocurrencies including Bitcoin and ETH were down by more than 30% in the last 2 or 3 months.
BCH price resilience against the bears was fueled by liquidity inflows since the third week of October.
Both its RSI and its MFI indicators have since surged significantly from their lowest points in October.
While the indicators signaled healthy liquidity flows, the price also demonstrated another major bullish sign this week.
BCH price just concluded the week with a break above its 2-month descending support.
This latest upside suggests that investors might be flocking to the cryptocurrency to leverage its upside potential.
While this may drive demand, it may also be a double-edged sword highlighting downside risks.
Spot liquidity inflows have cooled down compared to late October and the first half of November.
Moreover, derivatives activity revealed a surge in open interest from less than $380 million on 18 November, to over $600 million in the last 24 hours.
The rising open interest has almost doubled in the last 5 days, indicating that investors have been flooding into Bitcoin Cash.
It may also highlight the rising appetite for leverage, which could potentially lead to heavy liquidations if price pulls back unexpectedly.
Key Reasons Behind the BCH Price Upside
One of the key reasons for its upside in the last 2 days could be the fact that investors have been flocking into the cryptocurrency.
Most coins have been crashing and investors have been looking for alternative investments.
Demand for the cryptocurrency has been rising after investors discovered BCH’s resilience against the bears. Moreover, whales have been accumulating the cryptocurrency, consequently supporting higher highs.
On-chain data also confirmed rising trading volumes especially towards the weekend. This was likely due to a flood of investors after learning about the cryptocurrency’s resilience against the downside.
Whether Bitcoin Cash will maintain its momentum remained in the realm of uncertainty.
Nevertheless, the rising open interest underscored potential risks ahead which could introduce more volatility.