Bitcoin Cash Price Looks Undervalued Using this Metric

Bitcoin Cash price has been left behind in this bitcoin bull market so far. But usually BCH eventually catches up with BTC. This morning, Bitcoin is up around 5% to $ 57,300 as it continues to make its way towards $ 60,000. However, Bitcoin Cash (BCH) has improved by less than 2% and is struggling to repeat the triumphs of its larger rival.

Although the main reason Bitcoin’s rally is growing confidence that US regulators will soon be signing a BTC-based ETF, it should serve BCH in some way. If we compare the development of the Bitcoin price versus the Bitcoin cash price over the past 18 months, a correlation is evident. In early 2020, BTC saw relative outperformance versus BCH. However, both assets suffered similarly large drops during the March 2020 crash. Since then, Bitcoin has outperformed itself, but to varying degrees. The graph below shows that Bitcoin set apart from Bitcoin Cash in the second half of 2020 through the first quarter of 2021. However, Bitcoin Cash outperformed in April and narrowed the gap significantly. As a result, at the height of the bull market in 2021, BCH rose 390% compared to BTC + 190% compared to BTC. Then came the crash.

May 2021 crypto crash

The May liquidation event ushered in the 2021 bear market. Bitcoin Cash price lost 75% of its value through July, while BTC fell 55% over the same period. Since then, Bitcoin has doubled from $ 28,800 to $ 57,600, with BCH improving 55% from $ 384 to $ 600.

Similar to the first four months of this year, the gap between Bitcoin and Bitcoin Cash looks big, which could point to an impending outperformance for BCH. However, the dollar-valued BCH is facing some headwinds that it must overcome first.

Bitcoin Cash (BCH) vs. Bitcoin (BTC)

Bitcoin Cash price prediction

Bitcoin Cash Price Prediction

The daily chart shows that despite a trend breakout, Bitcoin Cash price has found resistance at the critical moving averages. Currently, BCH at $ 594 is between the 100 DMA at $ 574.60 and the 500 DMA at $ 607.70. Additionally, the inability to overcome the 50 DMA has caused the Relative Strength Index to show signs of exhaustion, going from 57.0 to 52.3. If the rejection at 50 DMA causes BCH to abandon the 100 day mark, it could return below trend support at $ 545, signaling a failed breakout.

However, successful clearance of the 50 DMA brings the significant 200 DMA into focus. A significant move above the long-term indicator at $ 670 would be very constructive. In this case, the September high of $ 788 offers the first resistance level. Additionally, if BCH breaks the September high, it could reach the April high of $ 1,216.

In conclusion, a closing price above the 200-day moving average could signal that BCH will outperform BTC. However, this depends on Bitcoin to maintain its upward trend. In addition, if Bitcoin goes down and Bitcoin Cash drops below $ 545, BCH could outperform.

Bitcoin Cash Price Chart (Daily)

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