Bitcoin Cash (BCH) continued its recovery on Wednesday, climbing above $489 and extending weekly gains to more than 8% as strong stability in the derivatives market strengthened the ongoing rally.
The development of the crypto market remains supportive, Bitcoin (BTC) is holding close to the level of $ 82,000, while technical indicators suggest that BCH may be ready to explode above the psychological barriers of $ 500.
Bullish derivatives strengthen BCH’s outlook
According to CoinGlass dataBitcoin Cash futures Open Interest (OI) jumped to $683.83 million on Wednesday from about $642 million recorded on Sunday.
The increase in Player Interest indicates that new funds are coming into the market, which indicates that traders are growing with them and the buying activity that will support the rise of BCH.
Additional data also shows strengthening bullish sentiment. CoinGlass shows the BCH long-short ratio rising to 1.25 on Wednesday, marking its highest level in more than a month. A ratio above one indicates that a large proportion of traders are prioritizing supplements.
Currently, CryptoQuant’s data is giving a positive outlook for Bitcoin Cash despite the mixed signals. The platform’s summary statistics show a high level of whaling activity in the futures and futures markets along with the cooling of the market, which helps to keep it going.
However, continuing to sell in the spot market can slow the pace of the rally and create temporary volatility near major resistance levels.
Technical outlook: BCH bulls look for a rally above $500
Bitcoin Cash trades near $489.60 after breaching several key technical levels. The indicator is now trading well above the 50-day Exponential Moving Average (EMA) at $457.91 and the 100-day EMA at $478.47, reinforcing a bullish pattern following a breakout above the old lows near $449.56.
Momentum signals continue to favor buyers. The Relative Strength Index (RSI) on the 4-hour chart has risen to 70, approaching the oversold level but still showing strong momentum.
At the same time, the Moving Average Convergence Divergence (MACD) remains in positive territory and continues to widen, meaning that buying pressure remains strong.
On the upside, resistance is near the 200-day EMA at $497.05. A firm daily close above that level could open the door to a push to the 38.2% Fibonacci retracement level at $515.06.
Further, the bulls may target a 50% retracement near $544.56, followed by the 61.8% Fibonacci retracement level around $574.07 if momentum accelerates.
At the bottom, immediate support is located near the confluence between $478.47 and $478.55, where the 100-day EMA is in line with the 23.6% Fibonacci retracement level.
Additional support is found at the 50-day EMA near $457.91, while the old trend line at around $449.56 could attract another buy dip during a deep pullback.
