Will AXS, BCH Join the Next Altcoin Rally? Indicators Suggest a Possible Rebound
Axie Infinity (AXS) and Bitcoin Cash (BCH) are currently experiencing a higher ratio of short positions compared to longs, according to a report by on-chain analytic platform Santiment. Despite the negative sentiment surrounding these cryptocurrencies, it could actually serve as a catalyst for a potential rebound.
The report mentioned that traders are generally optimistic about a recovery in many altcoins, with BCH and AXS being exceptions. However, in some cases, pessimism can be beneficial for cryptocurrencies if there is an influx of buying pressure when the long/short ratio is extremely low. If this occurs, the prices of AXS and BCH may start moving towards the upside.
As of now, AXS has rebounded from $7.95 to $8.12 and gained a slight 1.14% in the last 24 hours. On the 4-hour chart, AXS formed an asymmetric triangle between December 25 and January 10, leading to a breakout that pushed the price to $8.72. Despite a rejection at this level, the bulls have viewed the previous support at $7.65 as a potential catalyst for an upward trend.
The MACD indicator displayed red histogram bars, suggesting an increase in selling pressure. However, this bearish convergence could be nullified if the bulls manage to overpower the bearish momentum. If the price maintains its positive trend above $8, it could potentially break above the resistance at $8.72 and aim for $10 in the near future. Conversely, if the bears continue to dominate the market, a breakdown below $7.65 could occur, leading to a 5% correction.
Bitcoin Cash (BCH) recently reached a high of $298.40 on January 12 but faced profit-taking, causing it to drop to $252. However, it has since recovered to $256.19. The RSI indicator suggests a positive divergence, indicating that the price action may be ready for another increase. If the RSI reading surpasses 50.00, BCH might climb to $275 initially.
Similar to AXS, this potential movement in BCH would require an increase in buying pressure. The Money Flow Index (MFI) also confirms this possibility, with a reading of 48.17. MFI values above 80 suggest that an asset is overbought, while values below 20 indicate oversold conditions. Thus, the MFI reading for BCH implies that it has avoided falling into oversold territory. If the MFI continues to rise, it could potentially indicate a price increase for the cryptocurrency.
Please note that the information presented in this article is for informational and educational purposes only and should not be considered financial advice. Readers are advised to exercise caution and do their own research before making any investment decisions.