Overbought? Bitcoin Cash Looks Extended After 80% Gain

The world's fourth largest cryptocurrency looks overbought and due for a pullback.

After confirming a bull breakout on April 15, bitcoin cash ultimately rallied more than 80 percent in the last week.

As a result, bitcoin cash has outperformed its peers over the last seven days, rising well above the $1,000 mark.

Stepping back, the news of a coming technical upgrade seems to have played a big role in boosting BCH prices.

The bitcoin cash network is scheduled to change the cryptocurrency's underlying code, increasing its block size from 8MB to 32MB, on May 15.

While BCH investors will not be making free money out of thin air, prices have still rallied sharply, possibly because investors tend to associate hard forks with "Free money." And once the investors realize the hard fork is only a software upgrade, the rally may well run out of steam.

Backing up that argument, the technical charts show the rally is overdone and a pullback could be on the cards.

Daily trading volume has also jumped 374 percent week-on-week, signaling a strong rally.

The relative strength index stands well above 80.00, signaling short-term overbought conditions.

CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.