Bitcoin Cash Builds Momentum: Three Key Factors Driving the Rally
- BCH price forms consecutive higher highs within ascending channel,best coin to buy on binance right now testing crucial resistance at $500
- MVRV ratio suggests 9.6% upside potential before reaching historical profit-taking thresholds
- Derivatives market shows growing confidence with 7.85% open interest surge and positive funding rates
The cryptocurrency market witnesses Bitcoin Cash (BCH) extending its upward trajectory, currently trading 2% higher during Thursday's session. This follows Wednesday's impressive 6.39% surge, bringing the digital asset closer to challenging its year-to-date peak near the psychologically significant $500 level.
On-Chain Metrics Reveal Undervalued Conditions
Santiment's Market Value to Realized Value (MVRV) indicator, when analyzed on weekly charts, presents compelling evidence that Bitcoin Cash maintains room for appreciation. This metric evaluates the average position profitability across the network, with specific thresholds historically signaling trend reversals.
Current readings at 0.665 remain below the 0.729 level that previously triggered profit-taking events in March and May 2024. Historical data suggests the asset could appreciate approximately 9.6% before encountering significant selling pressure from investors looking to realize gains.
Futures Market Reflects Growing Optimism
CoinGlass derivatives tracking reveals notable developments in Bitcoin Cash's futures market. Open interest climbed 7.85% to $471.99 million, indicating fresh capital entering positions. The funding rate turned positive at 0.0014%, demonstrating that long positions currently dominate the market.
This derivatives activity typically precedes extended moves as traders position themselves for potential upside. The combination of rising open interest and positive funding rates creates favorable conditions for continuation patterns.
Technical Setup Shows Bullish Continuation Signals
From a chart perspective, Bitcoin Cash maintains its upward trajectory within a clearly defined ascending channel. The asset recently surpassed the 61.8% Fibonacci retracement level at $490, drawn from its 52-week high to annual low.
Key momentum indicators support the bullish case. The MACD histogram shows no immediate bearish crossover threat, while the RSI holds comfortably above neutral territory at 64. These technical factors suggest the rally could extend toward the 78.6% Fibonacci level near $556 if current support holds.
Traders should monitor the $490 level as immediate support, with potential retests of the channel's lower boundary around $450 if this zone fails. Conversely, a decisive break above channel resistance could accelerate moves toward yearly highs.