- Whales exchanged a large amount of BCH between wallets.
- Although Open Interest declined, BCH’s momentum was bullish.
on August 7 Bitcoin cash [BCH] recorded the highest number of transactions within the $100,000 range since July 13. These large-scale movements continue whales often receive a lot of attention. But hopes of a price spike among market participants have yet to materialize, raising questions about their potential influence on price action.
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Driving the change in motion
Well, the actions in the derivatives market suggest that the average trader is still expecting a change from BCH’s recent downtrend. One indicator that suggested this was the currency’s funding rate.
Funding rates are periodic payments from long or short positions to keep their futures or options contracts open. When the funding rate is positive, it means that traders are optimistic about the price action.
Conversely, a negative funding rate implies a bearish stance. At press time, BCHs financing rate had left the negative area and had jumped into the positive area.
Source: Coinglass
From the chart above, traders’ feeling was that BCH could retrace $300 soon and likely rise above it. At the time of writing, the coin was trading hands at $239.87 – down 11.62% in the past 30 days.
Buyers at the wheel
BCH was the star artist on the market a month ago. At the time of Bitcoin Cash Open interest (OI) was close to the highest point of the year. Open interest is the number of outstanding derivative contracts that have not yet been settled.
When the OI increases, it indicates an increase in liquidity. But when interest rates fall, it means traders close their positions, and this negatively impacts volume in the market.
Source: Coinglass
Between July 2nd and press time, BCH’s Open Interest plummeted. This means that the price movement is slowing down and BCH’s recovery to USD 300 may not be fast.
According to the price action, the 4-hour BCH/USD chart showed that buyers were in check from the market. This was indicated by the status of the Moving Average Convergence Divergence (MACD).
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At the time of writing, the MACD was 1.74 as the blue dynamic line was above the orange line. A negative MACD means that the 12-day EMA is lower than the 26-day EMA. This suggests a bearish bias.
Source: TradingView
But the indicator’s positive readings indicate bullish momentum. So, as it stands, traders may want to refrain from opening short BCH positions.