On December 19, Bitcoin 
$77,690 Cash (BCH) witnessed one of the most remarkable price movements in recent times. Within approximately 24 hours, BCH gained nearly 10% in value, prominently highlighted in the derivatives market due to high trading volumes. However, this upswing was not universally celebrated across all investor segments. While derivative investors aggressively took positions, spot market investors remained cautious, raising questions about the rally’s sustainability.
Rising Appetite for Long Positions in Derivatives Market
The primary driver of BCH’s surge was the opening of long positions in the futures market. According to CoinGlass data, capital inflow into BCH perpetual contracts increased rapidly across major centralized exchanges. With an additional entry of approximately $184 million, the total open interest soared to $786 million. This uptick signals short-term investors’ growing bullish expectations for BCH.
Supporting this trend were the funding rates, which transitioned into positive territory, indicating that long position holders were paying those with short positions. Measured at around 0.0044%, this rate revealed a growing purchase-driven pressure in the market. Conversely, investors holding short positions faced unfavorable conditions, as evidenced by approximately $2.54 million in short liquidations over the last 24 hours, highlighting the surge’s intensity.
Persistent Selling by Spot Investors
Contrary to the optimism in the derivatives market, spot investors maintained a more reserved outlook towards Bitcoin Cash. Net flows on spot exchanges showed that BCH was being returned to exchanges, signaling heightened selling pressure. On December 19 alone, around $3.93 million worth of BCH was sent to exchanges and sold, marking a stark reversal from the limited buying trend observed earlier in the month.
Weekly data reflect a continuation of this selling pressure. A net outflow of approximately $4.88 million was recorded in the past week, with these figures escalating to $53.58 million starting from the week of December 8. According to experts, the recent price surge motivated investors aiming to sell at higher levels rather than accumulate for the long term.
From a technical analysis standpoint, BCH is currently moving within a symmetrical triangle formation, indicative of potential upward movement. Although the price briefly approached the $651 mark, it needs to break the descending trend resistance and the horizontal resistance in the $598-606 range. The Money Flow Index rising above 50 also demonstrates incoming capital; however, maintaining this momentum is critical.
A similar situation occurred recently with Litecoin. In Litecoin’s case, increasing long positions in derivative markets spurred short-term price jumps, but spot investor sell-offs limited the gains. This scenario has once again shown that derivative-driven rallies in major altcoins can be vulnerable without sufficient support from the spot market.
