The bitcoin cash price collapsed to the lowest level since February 2019 as demand for the coin crashed. BCH is trading at $108.47, which is about 97% below the highest level in 2021. As a result, the coin’s market cap has crashed to about $2 billion, making it the 32nd biggest cryptocurrency in the world.
BCH and BTC correlation
Bitcoin cash is a leading cryptocurrency that was born out of a hard fork of the main Bitcoin. As such, both coins serve a similar role in that they are widely used to conduct online transactions.
For a long time, BCH and BTC had a close correlation because of their wide spread. At the time, Bitcoin Cash used to rise whenever BTC jumped and vice versa. In most cases, investors used to buy the cheaper BCH when Bitcoin rose.
In recent months, however, this correlation has weakened somewhat. For example, in November, when Bitcoin hit an all-time high of nearly $70,000, Bitcoin was around 62% below its all-time high. Today, as BCH nears its all-time low, Bitcoin is still significantly above its all-time high.
The disconnect between BCH and BTC is mostly because the number of people using bitcoin cash on a regular basis has collapsed. A quick look at on-chain data shows that the amount of BCH transacted every day started falling in 2021.
The spot price of bitcoin also crashed due to macroeconomic factors. For example, there is the lingering fear of a recession in the United States as the Fed raises interest rates. Recent data shows that key sectors of the economy are in decline. For example, retail sales, services and manufacturing all declined.
At the same time, the Federal Reserve has started hiking interest rates. It has hiked by 150 basis points and hinted that it will deliver more increases in the coming months.
Bitcoin Cash Price Prediction
The daily chart shows that the price of BCH has been in a strong bearish trend over the past few months. It crashed 13 days in a row and is approaching its lowest level on record. The coin fell below the 25- and 50-day moving averages while the Relative Strength Index (RSI) rose to the oversold level of 26.
Therefore, at this stage, there are no signs that bitcoin cash price is close to its bottom. As such, the coin could continue falling as bears target the all-time low of $53.
