BCH Price Rebound: The Battle Between Derivative Longs "Picking Up" and Spot Investors "Fleeing"

Bitcoin Cash [BCH] rose 10% over 24 hours on December 19, but behind this rally lies an interesting market phenomenon—buy orders and sell orders are driven by completely different forces. Derivatives traders are actively going long, while spot investors are taking the opportunity to exit.

Leverage Capital Flows In, Perpetual Contract Market Turns Optimistic

In this rally, perpetual contract traders have become the most aggressive bullish force. According to CoinGlass data, open interest in BCH perpetual contracts increased by $184 million in mid-December, reaching a total of approximately $786 million. This figure alone indicates the strength of leverage capital entering the market.

Changes in funding rates further confirm the market sentiment reversal. When the funding rate shifts from negative to positive (reaching about 0.0044%), it means long positions need to pay shorts, which usually signals that the bulls have gained the market’s initiative. Data shows that on December 19, $2.54 million worth of short positions were forcibly liquidated in a single day, and the profit-taking by longs further fueled their enthusiasm to go long.

A True Reflection of the Spot Market: Large Sell-offs and Long-term Pessimism

But the story in the spot market is quite the opposite. Also on December 19, about $3.93 million worth of BCH was transferred into exchange wallets and immediately sold. This is a complete reversal from early December, when spot investors were still gradually building positions.

Even more concerning are the weekly data. Last week, net outflows in the spot market reached $4.88 million, and the week before (starting December 8), the sell-off was as high as $53.58 million. What does this severe imbalance in buy-sell ratios indicate? Investors may be cashing out at higher prices rather than holding long-term positions.

When the “virtual prosperity” in derivatives markets encounters the “real cash outflow” in the spot market, the pressure from the latter often becomes more apparent over time.

Key Technical Challenges

From the chart, BCH is moving within a symmetrical triangle, a pattern that typically signals an upcoming breakout. But bulls face two hurdles:

• The dynamic resistance formed by the downward trendline needs to be broken
• The horizontal resistance between $598 and $606 must be effectively surpassed

Currently, BCH is trading around $621.34, down 4.62% in 24 hours, indicating that the rebound momentum has weakened.

However, the Money Flow Index (MFI) has entered above 50, suggesting that capital inflow still dominates. If this trend of capital inflow can be maintained, BCH may continue to challenge higher levels, but only if the selling pressure in the spot market can be absorbed.

Who Will Ultimately Take the Lead?

The tug-of-war between derivatives bulls and spot sellers hinges on which side’s strength endures longer. In the short term, leverage-driven momentum can generate impressive gains, but when long-term investors start cashing out, this rally could quickly fade.

The sustainability of BCH’s current rebound ultimately depends on whether the spot market’s attitude will change as prices rise.