Is It a Dead Cat Bounce Trap? Bitcoin Cash at Risk of Breaking Below $522
Is It a Dead Cat Bounce Trap? Bitcoin Cash at Risk of Breaking Below $522
Bitcoin Cash (BCH) has repeatedly failed to break through key resistance levels, fueling fears of a dead cat bounce in which a brief rebound is followed by another sharp drop. Now pushed below $522, both derivatives and on-chain data point to strong selling pressure, raising the possibility of a further decline toward the $478 level.
According to investment-focused outlet FXStreet on February 10 (local time), Bitcoin Cash is showing a clear bearish trend as of Tuesday, trading below the $522 mark. The outlet assessed that after facing resistance multiple times in a major resistance zone, BCH reversed into a downtrend, and that current technical indicators and market data point to a classic dead cat bounce scenario— a temporary rebound within a broader downtrend.
Investor sentiment in the derivatives market has cooled sharply. CoinGlass data show that the long/short ratio for Bitcoin Cash stands at 0.90. This is below the neutral benchmark of 1, indicating that short positions betting on price declines dominate over bets on price increases. In addition, CryptoQuant analysis shows that selling pressure is prevalent in both spot and futures markets, adding weight to the likelihood of further correction.
From a technical analysis perspective, the $534.80 zone has been identified as a critical barrier that must be overcome. This level corresponds to the 61.8% Fibonacci retracement between the late-January high and early-February low, and overlaps with a previously broken uptrend line as well as the 200-day exponential moving average (EMA) at $544.70, forming a strong resistance area. Bitcoin Cash has failed to break above this zone and remains under downward pressure, making the current movement around $525.40 likely an extension of the broader downtrend.
If further correction occurs, the first support level is expected around $478.70. The Relative Strength Index (RSI) stands at 44, below the neutral level of 50, suggesting increasing downside pressure. The Moving Average Convergence Divergence (MACD) is converging, but if it fails to confirm a bullish crossover (golden cross), bearish momentum could persist and deepen the decline.
That said, a rebound scenario cannot be completely ruled out. If Bitcoin Cash regains buying strength and successfully breaks above the 200-day EMA at $544.70, closing the day above that level, market sentiment could reverse. In that case, the price could extend gains toward the next resistance at $564.00, where the 100-day EMA is located.
*Disclaimer: This article is for investment reference only, and the publisher is not responsible for any investment losses incurred based on this information. The content should be interpreted solely for informational purposes.*
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