- Bitcoin Cash price has been in a strong bear market recently.
- This happened as demand for Bitcoin Cash has evaporated.
Bitcoin Cash price has been in a strong sell-off in the past few months as demand for the coin has dried up. The BCH token has crashed to $176, which is close to its lowest level since May 28th. It has fallen by more than 78% from its highest point in 2021, bringing its market cap to over $3.3 billion, making it the 27th biggest cryptocurrency in the world.
BCH demand evaporates
Bitcoin Cash is often seen as a viable alternative to Bitcoin. Besides, the coin was born from a hard fork of Bitcoin itself.
Many blockchain users prefer using Bitcoin Cash instead of BTC because it is not as congested as Bitcoin. As a result, its transaction costs are substantially lower and the speed is much faster.
In the past few months, demand for Bitcoin Cash has evaporated as people fear about the changing monetary policy.
The Federal Reserve and other global central banks have changed their tune on monetary policy. For example, the Fed has already hiked interest rates by 0.75% this year and analysts believe that more hikes are on the way. On Thursday, the European Central Bank signaled that it will start hiking interest rates as well.
Learn more about how to buy Bitcoin Cash.
Another sign that demand for Bitcoin Cash and other cryptocurrencies is that inflows to exchanges has been on a steady downward trend for the most part of the year. This is also evidenced by the fact that many companies in the industry have seen a sharp decline in users.
These include companies like Coinbase and Binance. In the first quarter, Coinbase lost more than $400 million and saw its customer numbers fall.
Demand for Bitcoin Cash has dropped because of the stronger US dollar and the surging inflation metrics in most countries.
Bitcoin Cash price prediction
The daily chart shows that the BCH price has been in a strong bearish trend in the past few months. The sell-off gained momentum when the coin moved below the support at $260. It has moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved slightly below the neutral point at 50.
Therefore, like I warned about Bitcoin this week, there is a likelihood that the Bitcoin Cash price will also continue falling in the near term. If this happens, the next key support level will be at $140.
