In a recent development, the on-chain analytic platform Santiment shed light on the prevailing short positions in two prominent cryptocurrencies, Axie Infinity (AXS) and Bitcoin Cash (BCH). Unveiling an unusual scenario where short interest surpassed long positions, Santiment speculated that the negative sentiment surrounding these digital assets might be a precursor to a market rebound.
Despite a generally optimistic outlook for recovery in many altcoins, AXS and BCH emerged as exceptions to the trend, facing skepticism from traders. Contrary to conventional wisdom, such bearish sentiments can sometimes catalyze a cryptocurrency’s upward trajectory, especially if a surge in buying pressure occurs when the long/short ratio is exceptionally low.
AXS Resilience
AXS displayed resilience by bouncing off the $7.95 mark and trading at $8.11. This upward movement marked a modest 1.61% gain over the last 24 hours. Analyzing the 4-hour chart, AXS revealed the formation of an asymmetric triangle between December 25 and January 10. While this pattern initially triggered a breakout with the price reaching $8.72, subsequent rejection brought AXS back to $7.65, now identified as a key support level for potential upward momentum.
Source: TradingView
The MACD indicator was cautious, with red histogram bars indicating increased selling pressure. However, the bearish convergence could be mitigated if bulls overpower the prevailing negative momentum. A positive position above $8 might pave the way for AXS to breach the resistance at $8.72, with a possible trajectory toward $10 in the upcoming week. Conversely, if bears persist, a breakdown below $7.65 could lead to a 5% correction.
BCH Journey: Peaks, Pullbacks, And The Road To $275
On the BCH front, the cryptocurrency reached a zenith at $298.40 on January 12, only to experience profit-taking that temporarily pulled the price down to $252 before a subsequent recovery to $256.19. Indicators from the Relative Strength Index (RSI) hinted at a positive divergence, suggesting a potential resurgence in price action.
Source: TradingView
A breakthrough with the RSI reading surpassing 50.00 could initially propel BCH towards $275, contingent on an escalation in buying pressure. This prospective movement was corroborated by the Money Flow Index (MFI), which is currently at 48.17.
While an MFI above 80 typically indicates overbought conditions, the current reading for BCH suggests that the asset has successfully avoided venturing into oversold territories. Should the MFI sustain its upward trajectory, this trend may serve as an indicator of anticipating a potential price increase for Bitcoin Cash in the near future.