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Bitcoin Cash (BCH), a cryptocurrency once billed as a better version of Bitcoin, is tumbling in the market today following its Halving event. And it isn’t just about BCH price; it appears that trader interest is also plummeting fast.
According to CoinGlass data on April 12, Bitcoin Cash’s open interest quickly evaporated roughly one week after the network halved its miner rewards.
At a Glance: Bitcoin Cash’s Tumbling Open Interest
In perpetual trading, open interest refers to the total amount of money committed by market participants, whether holding long or short positions.
This metric shows market activity and can be used to gauge overall momentum.
As of writing, open interest stands at $438.96 million, down roughly -10% in the past 24 hours. This fall is down nearly -30% from April highs of around $600m registered a few hours after halving.
The Bitcoin Cash open interest started gaining momentum in late March in anticipation of the BCH Halving event (which occurs before Bitcoin’s). Usually, whenever there is a Halving, prices tend to rise after a dip during the event – typically a few weeks later. However, looking at price charts, BCH price is under immense selling pressure.
BCH Price Analysis: Bitcoin Cash Price Falling Rapidly – Holders in Panic
After the initial rally on April 4, which saw prices rally to around $720 by the close of last week, the BCH price began tumbling aggressively.
Since Monday, BCH price has dropped by -15%, with bears nearly wiping out gains posted on the Halving day itself – leaving some holders in panic.
(BCHUSDT)
On April 10, when prices nearly fell by -12%, open interest stood at over $480M. Since then, the open interest trend has been decreasing consistently. This could be interpreted to mean traders are exiting due to either a loss of confidence or adopting a wait-and-see approach.
Still, how open interest builds up will depend on multiple other market factors. BCH’s positive correlation with Bitcoin, for instance, might force market participants back to the table.
However, for now, and considering the choppy price action, it is likely that BCH’s open interest will continue to drop. Further BCH price dumps below $550 could force open interest back to January 2024 level by consequence – stay tuned.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
