NOIDA (CoinChapter.com)— Bitcoin Cash price has rallied recently, helping the token reach its highest level in more than a month on July 29.
The rally saw the BCH price spike by nearly 27% since July 26 to reach a daily high near $459 on July 29. Although it seems bears have moved in to book profits on July 30, the token has remained in the green over the past 24 hours as bulls fight hard to keep the BCH price above $430.
Market Dynamics Hint At Bullish Sentiment for Bitcoin Cash.
The Bitcoin Cash price has seemingly benefitted from the positive news coming out of the Bitcoin 2024 Conference. With several personalities either more integration and adoption of Bitcoin in the future, the wider crypto market also saw an influx of buyers.
For instance, Donald Trump’s endorsement of Bitcoin sent the token’s futures market to new record highs.
Moreover, recent market activity in Bitcoin Cash (BCH) futures reveals a growing bullish sentiment. The increased open interest alongside a rising BCH price indicates a renewed interest among traders.
The predominance of negative funding rates suggests a potential short squeeze scenario, as bearish positions could be unwound, pushing prices higher.
Recent liquidations data, showing a spike in short liquidations, corroborates the chances of a short squeeze, further driving the upward momentum as shorts cover their positions. Since July 28, traders have liquidated more than $3.7 million worth of short positions.
In comparison, long positions saw liquidations worth $1.5 million in the same time frame.
Additionally, mid-tier investors holding 10,000 to 100,000 BCH have been accumulating, indicating confidence in the asset’s potential upside. However, some large holders have reduced their positions, which could temper the rally.
Nevertheless, the overall market conditions point towards a bullish outlook, as increasing demand from mid-tier investors supports the current price surge. The interplay between short covering and new long positions contributes to the positive price movement observed in BCH recently.
Bitcoin Cash Price Breaks Out Of Bullish Setup
Meanwhile, BCH price broke out of a bullish technical setup called the ‘falling wedge.‘
A falling wedge pattern features a pair of converging trend lines connecting lower highs and lower lows, forming a narrowing shape that slopes downward.
The pattern typically suggests that an asset’s price, while consolidating in a downtrend, is losing bearish momentum and preparing for a potential reversal to the upside. Typically, a breakout occurs in the direction of the overall trend, which, for a falling wedge, is upward.
To estimate the price target of a falling wedge pattern, traders measure the widest part of the wedge at the beginning of the formation. They then project this distance upward from the point of the breakout to set a potential target.
An accompanying increase in trading volume can further confirm the reliability of the breakout. Higher volume during the breakout suggests stronger market conviction, supporting the likelihood of a successful price reversal.
According to technical analysis rules, the BCH USD pair could rally over 81% from the breakout level to reach the pattern’s theoretical price target of near $757.
