The Bitcoin Cash (BCH) price recently retraced from the $265 level after scoring double-digit weekly gains. What are the critical factors holding back the BCH price rally?
Bitcoin Cash’s price bounced 10% this week, briefly reclaiming $265 for the first time since July. Will the ongoing sell-off among the BCH miners put the price rally at risk?
BCH Miners Have Cut Their Reserves by $200M in 30 Days
While mega-cap altcoins like Chainlink (LINK) and Solana (SOL) have raced to new 2023 peaks, BCH has only mustered 10% weekly gains. On-chain data reveals that BCH miners have been on a month-long selling frenzy.
The IntoTheBlock chart below shows that on September 29, the BCH miners held a cumulative balance of 6.59 million BCH. That figure has rapidly dwindled to just 5.81 million BCH as of October 25.
This implies that the Bitcoin Cash miners have offloaded 780,000 BCH on the markets over the past month.
The Miner Reserves metric tracks the real-time balances of deposits in wallets controlled by recognized node validators and mining pools.
Typically, declining miners’ reserves mean that the node validators are actively liquidating their block rewards rather than HOLD for future gains.
If it persists for a prolonged time-frame it could dilute the market supply and put downward pressure on price. Unsurprising, the BCH price performance this week has lagged behind its peers in the top 20 assets ranked by market capitalization.
When valued at the current market price of $255, the 780,000 BCH sold by miners over the past month is worth $199 million. If the miners keep selling at this rate it could effectively put the price rally at risk.
Investors Can Look Toward Bullish Whales
While the miners’ $199 million sell-off ensued, the bullish crypto whales have done enough to inspire confidence in the Bitcoin Cash markets.
Between September 29 and October 25, whale wallets holding 1,000 to 10 million BCH have been accumulating, according to on-chain data from Santiment.
The chart below shows that the whales increased their holdings from 11.66 million to 11.70 million BCH during that period. The 40,000 BCH accumulation is currently valued at $10.2 million.
Whale Wallet Balance metric provides a snapshot of real-time changes in the number of coins held by a group of large institutional investors.
The $10.20 million whale accumulation in the past month pales compared to the miners’ $199 million sell-off. However, an increase in the whales’ balances often shores up confidence among retail investors to mop up the excess market supply.
Hence, if the whales keep buying Bitcoin Cash in the coming days, the BCH price rally could gain more momentum.
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BCH Price Rally: The $280 Resistance Could Be Critical
If the crypto markets’ prevailing bullish sentiment intensifies, the whales could propel Bitcoin Cash price closer to $300 in the weeks ahead.
The Global In/Out of the Money data, which groups all current BCH holders by their entry prices, also confirms this optimistic prediction. However, it currently depicts that the initial resistance at $280 could form a major obstacle.
As seen below, 970,320 addresses had bought 1.26 million BCH at the average price of $282. With BCH’s price currently trading at a 3-month peak of $255, a number of those holders could consider taking profits early.
But if the BCH bulls can force a decisive breakout from the $280 resistance, the price rally could promptly head toward $300.
Conversely, the bears could attempt to force a reversal below $200. However, in this case, the bulls can mount a support buy-wall at $225.
At that zone, 1.04 million addresses had bought 4.32 million BCH at the average price of $225
But if the bears can upend that support level, Bitcoin Cash could suffer a bearish price reversal toward $200.
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The post Bitcoin Cash (BCH) Miners Cut Reserves to 5-Year Low – Can the Bulls Sustain the Rally? appeared first on BeInCrypto.