Bitcoin Cash (BCH) is aiming for a monthly high as the "Uptober" spirit returns.

As of the time of writing on Monday, Bitcoin Cash (BCH) is trading above 550 USD, maintaining a 10% increase achieved since Sunday. This development occurs against the backdrop of the market expecting a lively week to close out October – a period that investors often humorously refer to as “Uptober.” Notably, the increase in the number of active addresses along with strong interest signals from traders holding large wallets in the derivatives market are reinforcing expectations for a new bullish phase for Bitcoin Cash.

Strong demand, profitable BCH supply recovers

The demand for the native token of the Bitcoin Cash network (BCH) is gradually reviving as network activity remains stable. According to data from Santiment, the number of daily active addresses on the Bitcoin Cash network has continuously increased this month, reaching a milestone of 7.5 million on Sunday – reflecting the steady expansion of the user community.

Alongside that, the amount of BCH in profit has also increased significantly, from 14.67 million tokens on Wednesday to 17.7 million tokens, indicating that the demand in the market is clearly recovering.

The operational address and supply of Bitcoin Cash are currently profitable | Source: SantimentThe synergy between user growth and increasing demand for BCH is expected to continue to be the catalyst driving the price of this coin upwards in the coming days.

Whales take advantage of the opportunity from negative funding rates in the derivatives market

The derivatives market is witnessing a vibrant wave around Bitcoin Cash (BCH), as trading demand surges and large investors – also known as “whales” – quickly capitalize on the shifts in market sentiment. Data from CryptoQuant shows that the group holding a large amount of capital continuously places significant orders on BCH futures contracts. Typically, the increased activity of “whales” in the derivatives market is seen as an early signal for the potential formation of a new bullish trend.

The average order size of BCH futures contracts | Source: CryptoQuant. In line with that trend, statistics from CoinGlass recorded that the open interest (OI) of BCH futures contracts increased by 13.8% in the last 24 hours, reaching 382.96 million USD. The bullish momentum of OI reflects the returning “risk appetite” as the nominal value of Long positions continues to grow.

Notably, the average funding rate weighted by OI has dropped sharply to -0.0323%, compared to -0.0026% recorded on Sunday. This indicates that the bears are paying a higher fee to maintain their short positions in the context of increasing buying demand – inadvertently providing additional momentum for the bulls, which may continue to push BCH prices higher.

BCH derive data | Source: CoinGlass## Bitcoin Cash approaches an important resistance area

After a strong increase of 10% on Sunday, Bitcoin Cash (BCH) is currently “taking a break” around the 560 USD mark. At the time of writing, this coin is maintaining a sideways movement within a narrow range between the 78.6% and 61.8% Fibonacci retracement levels, corresponding to 573 USD and 542 USD.

If buying power from large investors continues to increase and the price exceeds the threshold of 573 USD, the recovery momentum of BCH could be extended, aiming towards the peak area of 615 USD – a price last recorded on October 3.

On the daily chart, the MACD indicator is expanding positively as the signal line slopes upward and the green histogram bars cross above the 0 mark, reflecting increasingly strong bullish momentum.

BCH/USDT daily chart | Source: TradingViewHowever, the RSI has risen to 82, indicating extreme overbought conditions – a warning sign that buying pressure may be peaking and the risk of a short-term correction could arise as investors begin to take profits.

In the event of a price adjustment, the notable support areas for Bitcoin Cash are at 542 USD, followed by the 200-day EMA around 531 USD, where the bulls may seek to consolidate their position.

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