- Bitcoin Cash price has been under intense pressure in the past few weeks.
- This retreat is because of a situation known as buy the rumor, sell the news.
- Most analysts expect the Securities and Exchange Commission to approve a Bitcoin ETF.
Bitcoin Cash price nosedived on Monday morning even as enthusiasm about a spot Bitcoin ETF rose. The BCH price plunged to a low of $220, its lowest point since Tuesday last week. It has crashed by more than 21.74% from its highest point this year.
Why BCH is plunging
Bitcoin Cash price has joined other cryptocurrencies in a strong sell-off in the past few weeks. After soaring to $46,000 last week, Bitcoin has retreated to $43,000 while Ethereum has slipped to $2,180. BNB and Solana have moved to $292 and $86, respectively.
This retreat happened as investors remained excited about the upcoming approval of a spot Bitcoin ETF. Companies like Blackrock, VanEck, Invesco, and Franklin Templeton have all submitted their final revisions of the document.
There are also signs that the SEC will approve these ETFs this week. Besides, it has been working with companies like JPMorgan and Goldman Sachs in the past few months. These are the biggest players in Wall Street.
The SEC has also held several meetings between Blackrock and Nasdaq. Blackrock is the biggest asset manager in the world while Nasdaq runs the second-biggest exchange in the United States.
Therefore, while this is good news for Bitcoin and BCH, their prices are falling because of a situation known as buying the rumour, selling the news. As the name suggests, this is a situation where investors buy an asset in anticipation of a major event and then dump them when the event happens.
It is a relatively popular situation in both the crypto and stock market. For example, a few months ago. XRP price jumped sharply after Ripple won a lawsuit against the SEC. It has then retreated sharply and has never recovered since then.
The other reason why Bitcoin Cash price is retreating is the strong US jobs numbers and the ongoing Middle East crisis. Data from the US showed that the economy added over 220k jobs in December as the unemployment remained steady at 3.7%. Shipping costs and energy prices have also risen, meaning that the Fed will likely delay its rate cuts.
Bitcoin Cash price forecast
The daily chart shows that the BCH price has been under intense pressure in the past few weeks. In this period, the coin has crossed the 50-day and 25-day Exponential Moving Averages (EMA).
It has also dropped below the Ichimoku cloud while the two lines of the MACD have moved below the neutral point. The Relative Strength Index (RSI) has retreated below the neutral point.
Therefore, the outlook for the BCH price is bearish, with the next point to watch being at $200. It will then rebound briefly after the Bitcoin ETF approval this week.
