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Investors maneuvering through the fluctuating cryptocurrency market might shift their focus towards Bitcoin’s derivative, Bitcoin Cash (BCH), as it has notably enhanced its market liquidity in the third quarter, as per the analytics from Kaiko, a crypto data specialist based in Paris.
Market liquidity elucidates the capacity of a market to manage sizable purchasing and selling orders without experiencing substantial price shifts. An increase in liquidity or market depth translates to reduced slippage – the deviation between the anticipated trading price and the actualized price – and facilitates the implementation of substantial orders for heavyweight traders.
Grounding its liquidity assessments on metrics such as market depth, bid-ask spreads, and volumes stemming from “trade-worthy” platforms, Kaiko has delineated an overarching diminution in market liquidity since the collapse of Alameda Research in the preceding November.
BCH Price Study
Accumulating over a 10% uptick in market liquidity since Q2, Bitcoin Cash has managed to eclipse its prominent altcoin contemporaries and even the market pioneer, Bitcoin. Despite a 23% plummet to $234 in Q3 prices, crypto exchanges like Gate.io showed BCH price retraction from its preceding quarter’s 145% escalation. This being said, the cryptocurrency, positioned 17th in market capitalization, is no more a shade of Bitcoin. According to multiple sources, investors’ interest in BCH has recently been reignited all thanks to token updates and its sound in-crisis behavior.
Other cryptocurrencies like Stellar’s XLM, TRON’s TRX, and Ethereum Classic (ETC) also perceived a fortification in liquidity conditions, whereas Bitcoin, Ether (ETH), XRP, and Dogecoin (DOGE) manifested stagnancy. Concurrently, BNB of BNB Chain, OKB of OKX exchange, and Toncoin (TON) encountered a liquidity shrinkage. Kaiko highlighted in its quarterly analysis, “TON suffered the most pronounced underachievement in comparison to its market cap since a substantial volume is tethered to HTX, which was discarded due to presumed synthetic volumes; the token was deemed non-liquid on every platform.”
Despite these shifts, Bitcoin perpetuates its status as the most liquid cryptocurrency, sustaining its attractiveness as a refuge within the cryptocurrency market.
Forecasting Bitcoin Cash’s Price Trends
Recently, Bitcoin Cash has experienced a consistent downward trajectory from the resistance vicinity of $255. With BCH plummeting beneath the $232 support, it has ventured into a short-term bearish territory, paralleling Bitcoin and Ethereum.
Bears have managed to suppress the price beneath the $220 support, finding a footing approximately around the $205 zone (a multi-touch zone). With a low nearing $206.59, the currency is presently stabilizing its losses. A crucial bearish trend line appears to be emerging, with resistance close to $217 on the BCH/USD pair’s 4-hour chart.
Currently, Bitcoin Cash trades under $220 and the 100 simple moving average (4 hours), with immediate resistance situated near the $217 level and trend line. This is adjacent to the 23.6% Fib retracement level of the descent from the $255 peak to the $206 mark.
Subsequent predominant resistance resides around the $228 mark, or the 100 simple moving average (4 hours). Further resistance is found around the $232 level, nearing the 50% Fib retracement level of the downturn from the $255 peak to the $206 trough. According to the most accurate BCH price prediction, additional gains might propel the currency toward the $250 resistance vicinity.
Is a Downward Rupture Imminent for BCH?
If Bitcoin Cash struggles to transcend the $217 resistance, a continued descent might be in the cards. Preliminary support on the lower side is positioned around the $205 level.
Following that, significant support is situated around the $200 mark, a likely stronghold for bulls. Should the price be unable to maintain above the $200 support, it may gravitate towards the $184 support. Further depreciation might direct the currency towards the zone of $162 in the ensuing period.
The Importance of BCH
Conceived from a need to address the scalability issues experienced by Bitcoin, BCH introduced itself with a larger block size, aiming to facilitate more transactions and thereby optimize the transaction processing time and reduce fees. Its inherent design to be a peer-to-peer electronic cash system accentuates its utility for everyday transactions. Businesses and consumers alike utilize Bitcoin Cash as a medium of exchange, appreciating its low transaction costs and speedy transfer times, which are especially crucial in cross-border transactions.
Furthermore, BCH supports smart contracts and decentralized applications (DApps), broadening its utility in various decentralized finance (DeFi) sectors. This direct emphasis on usability establishes Bitcoin Cash as not merely an asset for speculation but a functional currency, aiming to be accessible and practical for both the crypto-enthusiast and the everyday user, thereby playing a pivotal role in the drive towards the mass adoption of cryptocurrency.
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