Bitcoin Cash (BCH) is showing strong momentum, rising 2% on Thursday following a 6.39% surge the previous day. The price action has formed a bullish ascending channel pattern, bringing BCH closer to the psychologically significant $500 level. With key on-chain metrics and derivatives data pointing to sustained buying pressure, market observers believe there’s room for further upside before profit-taking pressures emerge.
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On-Chain Metrics Reveal Room for Growth
One of the most telling indicators of Bitcoin Cash’s potential trajectory is the Market Value to Realized Value (MVRV) ratio, analyzed on a weekly timeframe by Santiment. The MVRV ratio helps assess whether investors are, on average, in profit or loss—offering insight into potential market reversals.
Currently, BCH’s MVRV ratio sits at 0.665, below the critical threshold of 0.729, which has historically triggered profit-taking events—such as those observed in March and May 2024. This suggests that while sentiment is improving, widespread optimism hasn’t yet peaked, leaving room for further appreciation before sellers dominate.
Should the MVRV ratio surpass 0.729, it could push toward the December 2024 high of 1.01, significantly increasing realized profits across the network. This trajectory would align with broader bullish cycles seen in previous years, reinforcing confidence among long-term holders.
The fact that the current ratio remains below reversal thresholds indicates that the rally may still be in its mid-phase—neither overextended nor under-recognized.
Derivatives Market Signals Growing Bullish Sentiment
Supporting the on-chain narrative, derivatives data reveals rising confidence among traders. According to CoinGlass, Bitcoin Cash’s open interest (OI) has surged by 7.85% over the past 24 hours, reaching $471.99 million. This increase reflects fresh capital entering the futures market, typically associated with strong bullish positioning.
More importantly, the open interest-weighted funding rate has turned positive at +0.0014%, indicating that long positions are dominating short positions. In perpetual futures markets, a positive funding rate means longs pay shorts—a mechanism designed to balance market exposure. Sustained positive funding often precedes continued upward price movement, as it reflects persistent demand.
This shift underscores growing institutional and retail participation in BCH derivatives, suggesting that the current rally isn’t just driven by spot buyers but also leveraged traders anticipating further gains.
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Technical Outlook: Ascending Channel and Fibonacci Targets
From a technical perspective, Bitcoin Cash continues to trade within a well-defined ascending channel pattern. The structure is formed by connecting swing lows from April 16, May 5, May 30, and June 22 to create a rising support line. Resistance is defined by highs from May 10, May 23, and June 19.
BCH has printed two consecutive green candles on the daily chart, with Thursday’s 2% gain pushing it above the **$490** level—the **61.8% Fibonacci retracement** of the move from its 52-week high of $640 down to its year-to-date low of $249.
A daily close above this key Fibonacci level could open the path toward the next resistance zone at $556, corresponding to the 78.6% retracement level. This would represent a significant step toward reclaiming the 52-week high.
Additional technical indicators support this bullish bias:
- The MACD (Moving Average Convergence Divergence) is showing signs of resurgence, with the main line hovering just above its signal line—suggesting strengthening bullish momentum.
- The RSI (Relative Strength Index) is at 64, indicating upward bias without entering overbought territory (typically above 70), leaving room for further price expansion.
However, failure to close above $490 could result in a retest of the channel’s lower boundary near **$450**, which has served as reliable support multiple times throughout the year.
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Frequently Asked Questions (FAQ)
Q: What is the significance of the MVRV ratio for Bitcoin Cash?
A: The MVRV ratio compares market value to realized value, helping identify whether investors are in profit. A ratio below 0.729 suggests room for growth before profit-taking typically begins.
Q: What does rising open interest mean for BCH?
A: Increasing open interest alongside price gains signals new money entering the market, often confirming trend strength and suggesting further upside potential.
Q: Is Bitcoin Cash likely to break its 52-week high?
A: With bullish technical patterns, supportive on-chain data, and growing derivatives activity, BCH has a realistic chance of challenging its $640 high—if macro conditions remain favorable.
Q: What happens if BCH fails to hold above $490?
A: A rejection below $490 could lead to a pullback toward $450, which acts as strong support within the ascending channel.
Q: How reliable is the ascending channel pattern?
A: Ascending channels are widely used in technical analysis to project trend continuation. Breakouts above resistance often lead to measured moves equal to the channel’s width.
Q: Can BCH reach $1,000 in 2025?
A: While not imminent, a sustained bull market combined with increased adoption and network upgrades could make $1,000 feasible in the longer term—though short-term targets remain closer to $550–$650.
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Final Thoughts
Bitcoin Cash is displaying a confluence of positive signals—from on-chain valuation metrics like MVRV to rising open interest and constructive technical patterns. While challenges remain, particularly around sustaining momentum above $490, the current setup favors further upside.
With the MVRV ratio still below historical reversal levels and derivatives markets showing increased bullish positioning, BCH appears well-positioned to test higher resistance levels in the coming weeks. Traders and investors alike should monitor key Fibonacci levels and channel boundaries for potential breakout or reversal signals.
As always, market conditions can shift rapidly. Combining technical analysis with on-chain insights offers a more comprehensive view—helping navigate volatility and identify high-probability opportunities in the evolving cryptocurrency landscape.