After posting triple-digit gains in June, Bitcoin Cash (BCH) started July on a negative note with a 13% price correction. On-chain data shows that Bitcoin Cash whales are now taking hawkish positions. Will this trigger a major retracement towards $250?
Bitcoin Cash caused a stir in June, posting gains of over 150% as it surged above $300 for the first time since May 2022. However, the bears are now trying to take control in July.
Cool Bitcoin Cash Whales on Buy Positions
According to on-chain data, the Bitcoin Cash whale group holding 1-10 million coins played a pivotal role in the June rally. Between June 21 and June 30, they bought 170,000 BCH coins worth around $52.4 million.
But remarkably, since the beginning of July, they have visibly stopped buying. Between July 1 and July 4, their total BCH balances remained around 1.51 million coins.
The Whales Wallet Balances metric gauges trading sentiment among large institutional investors by tracking real-time changes in the number of tokens they hold.
When whales buy more coins, the price of assets often increases due to their financial power and strategic influence over other investors.
As discussed above, the massive accumulation frenzy of this cohort of whales played a key role in the June price rally. As they now take a hawkish stance, it’s no surprise that BCH’s growth trend has flattened out.
If the whales maintain their neutral stance for longer, it is only a matter of time before other investors may interpret this as a bearish signal.
BCH user activity is declining
In a more bearish turn of events, user activity in the Bitcoin Cash ecosystem has been dropping persistently over the past week. On June 29, the Bitcoin Cash network registered 376,000 active users at a recent high.
However, as of July 4, the Santiment chart below illustrates how BCH Daily active addresses fell 23% to 309,000.
THE Active addresses (7d) measure changes in user activity by tracking the daily number of unique wallet addresses transacting.
When falling, a bearish signal suggests that the asset may struggle to attract new demand in the coming days.
Therefore, in addition to the neutral stance among Bitcoin Cash whales, mass market retail players also appear to be cooling their interest in BCH this week. If this trend persists, the price of BCH could drop below $250.
BCH Price Prediction: Bears Could Force a Pullback Below $250
Considering the factors mentioned above, Bitcoin Cash whales could force a pullback below $250 if they turn bearish. However, the bulls will offer support at around $265. In this zone, 147,000 investors who bought 564,000 BCH at the maximum price of $267 could prevent the crisis.
But if the bearish momentum builds and the support level caves in, BCH could eventually fall below $250.
Bitcoin Cash (BCH) Whales, June 2023. | Active addresses (7d) – Source: IntoTheBlock
Still, Bitcoin Cash bulls could continue the rally if BCH price can rebound again from around $300. However, the 234,000 investors who bought 421,000 BCH coins at the maximum price of $296 could trigger a pullback.
But if the resistance level does not hold, then BCH might hit a new high of $330 in 2023.
Disclaimer
In accordance with Trust Project guidelines, this price analysis article is provided for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased reports, but market conditions are subject to change without notice. Always do your own research and consult a professional before making financial decisions.