It is no surprise for Bitcoin Cash to perform this poorly when the entire crypto market fell deeper in the bear market due to various negative factors, including the much-publicized collapse of crypto exchange FTX.
According to CoinGecko, the token is down a further 1.4% in the past 24 hours. This doesn’t bode well as major cryptocurrencies like Bitcoin and Ethereum have started 2023 very weakly as well.
Bitcoin Cash And Bitcoin Connections
Since Bitcoin Cash is a fork of Bitcoin, BCH will have a strong correlation to BTC most of the time. To have a glimpse of where BCH will go, a look at what crypto analysts think of Bitcoin will provide strong insights on what the future for BCH will look like.
CryptoQuant analyst Dan Lim recently released his take on the current state of affairs in Bitcoin. He noticed that the top crypto is being dictated by a small number of whales. However, his analysis is contradicted by recent news that BTC is actually being accumulated by whales.
This might mean that Dan Lim’s analysis points to retail investor activity or a mix of both retail and whale activity.
— Rekt Capital (@rektcapital) January 1, 2023
2023: Year Of Reversals?
With institutional investors slowly edging their way to the market, an uptick in Bitcoin will translate to gains in BCH as the two are closely correlated. However, some major financial institutions have been lost on the idea of cryptocurrency as a portfolio diversifier due to the many controversies that plagued the crypto market.
If Rekt Capital’s hypothesis, which essentially says that 2023 will be the accumulation period before the potential 2024 crypto bull market, is true, gains will be up for the entire crypto market, especially Bitcoin Cash.
However, with the broader financial market having its worst year since the 2008 crisis, we can set 2023 to be a slow but steady phase of loss and gradual gain in the next few months.
In the short term, potential BCH investors and traders could hope that the current support at $96.18 will hold. But with potential downturns caused by further interest rate increases, we might see BCH bears test the $89.17 in the coming weeks.
With the start of another fiscal year, BCH investors and traders should watch out for macroeconomic developments as it also holds sway on the crypto market. Caution should still be exercised as the future is still uncertain for Bitcoin Cash and crypto as a whole.
-Featured image: Binance Academy