Bitcoin Cash (BCH) is breaking out strongly, aiming for the highest level in 2 years.

Bitcoin Cash (BCH) continues to break out, reaching a new yearly high of 648.20 USD in Thursday's trading session, benefiting from the Federal Reserve's decision to cut interest rates by 25 basis points (bps). Expectations that the Fed will continue to ease policies in the coming months further boost risk appetite, spreading strongly across the crypto market. On a technical level, on-chain data shows that BCH trading volume has surged to its highest level since December 2024, indicating that capital flows and investor interest are returning strongly.

###The Fed's decision to lower interest rates ignites risk sentiment

BCH surged nearly 3% on Wednesday, right after the Federal Open Market Committee (FOMC) decided to cut interest rates by another 25 basis points, igniting risk appetite in the crypto market.

Not only stopping at the previously forecasted capital reduction, the latest FOMC dot plot indicates that the average projected interest rate will be only 3.6% by the end of 2025, lower than the 3.9% set in June. This opens up the possibility that the Fed may cut rates an additional two times by 25 basis points, or once by 50 basis points in the coming year, following the recent move.

The interest rate picture continues to loosen: in 2026 it is expected to drop to 3.4% ( from the previous 3.6% ), and by 2027 it will be down to 3.1%, lower than the previous forecast of 3.4%; specifically, the long-term outlook remains unchanged at 3%.

This "moderate" stance has triggered a wave of optimism, pushing BCH to a new yearly high of 648.20 USD during Thursday's trading session.

###BCH trading volume hits a new peak this year

According to data from Santiment, the BCH ecosystem recorded a trading volume of up to 1.18 billion USD on Thursday, the highest level since December 2024. This surge reflects a strong inflow of capital and liquidity into the market, thereby further strengthening the bullish outlook for BCH.

BCH trading volume chart | Source: Santiment Concurrently, open interest (OI) in the BCH futures market continues to surge, from 486.36 million USD on September 11 to 595.78 million USD just a few days later. The increase in OI indicates that new capital is continuously flowing in, primarily in the form of buy orders, playing a crucial role in maintaining upward momentum.

Open contract chart of Bitcoin Cash | Source: CoinglassNotably, the Long/Short ratio of BCH on Coinglass has reached 1.28, the highest in over a month. With the ratio surpassing 1, the market is clearly leaning towards a bullish scenario, as the majority of traders bet that BCH will continue to expand its upward wave.

Long/Short ratio of BCH | Source: Coinglass###Bitcoin Cash price forecast: Target to surpass 700 USD

BCH started the week with a slight correction on Monday, but quickly regained momentum the next day and closed Wednesday's session above 616.70 USD. On Thursday, this cryptocurrency continued to climb, establishing a new yearly peak at 648.28 USD.

If the upward trend is maintained, BCH has the potential to extend the rally to challenge the level of 719.50 USD - the highest price since April 5, 2024.

BCH/USDT daily chart | Source: TradingViewOn the daily timeframe, the RSI indicator is currently at 65, surpassing the neutral threshold of 50 and continuing to rise, reflecting an increasingly strong bullish momentum. At the same time, the MACD continues to maintain the bullish crossover signal formed since the beginning of September, contributing to a positive outlook for BCH.

However, in the event that a correction pressure appears, the price is likely to retreat to test the 50-day EMA around 573.7 USD.

SN_Nour