The Bitcoin Cash (BCH) price has been struggling to find direction in the past few weeks. It is trading at $518, which is 15% below the March high of $607.
What happened: The price of Bitcoin Cash has been in a tight range recently as demand for the digital currency has waned. Indeed, its market cap has dropped to more than $9.77 billion, making it the 13th biggest digital currency in the world. It has also been passed by some of the relatively new digital currencies like Theta, Uniswap, and Binance Coin.
This price action is partly because of the overall performance of Bitcoin, whose price has struggled to move above $60,000, a few weeks after it reached an all-time high of close to $62,000.
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From a macro level, the BCH price has also struggled because of the performance of the bond market. Recently, bond yields have surged as investors price-in potential inflation that will lead to high-interest rates. In most periods, the prices of digital currencies tend to underperform in tight monetary conditions.
Bitcoin Cash price prediction
On the four-hour chart, we see that the Bitcoin Cash price has been in a relatively tight range recently. This is evidenced by the fact that the average true range (ATR), which is a measure of volatility, has dropped substantially. Also, the price is at the same level as the 25-day and 15-day exponential moving averages.
The BCH price has also formed a head and shoulders pattern, which is usually a bearish sign. The neckline of this pattern is at $470. Therefore, in the near term, the price could keep falling as bears target this neckline, which is about 10% below the current price. However, a move above the right shoulder at $550 will invalidate this trend.
