Bitcoin Cash’s blockchain data shows big investors, called whales, are buying more BCH as its price drops. This has people wondering: could this mean a big jump to $300 is on the way?
Bitcoin Cash (BCH) briefly reached $280 on Feb 12 but faced strong selling pressure, causing a 12% drop to $258. Despite this, large investors, known as whales, are buying BCH during this dip. Could this signal a potential surge towards $300?
Bitcoin Halving Impact on Mining and Altcoins
Experts predict that the upcoming Bitcoin halving could lead to approximately 20% of BTC miners shutting down operations. With block rewards set to halve from 6.25 BTC to 3.125 BTC in April, many miners may find their operations unprofitable.
This scenario presents an opportunity for miners to shift their focus to mining other lightweight Proof of Work (PoW) coins such as Bitcoin Cash (BCH), Litecoin (LTC), and Kaspa (KAS).
Investor Interest in Bitcoin Cash (BCH)
In anticipation of potential gains from this narrative, investors are increasing capital inflows into the BCH ecosystem, particularly as the price of BTC rallies.
Recent data shows that while BTC surged by 37% to reach a yearly peak of $52,858 between Jan 23 and Feb 15, BCH also saw a comparable gain of 34%. This indicates a close correlation between the price actions of Bitcoin and Bitcoin Cash in recent weeks.
Bitcoin Cash (BCH) Price Performance vs. Bitcoin (BTC) | Source: TradingView
Shift in Correlation and Recent Price Movement
However, this correlation shifted on Feb 15 when BCH experienced a significant pullback after surpassing $290. As of Feb 18, BCH is undergoing a 12% correction.
Despite this correction, BTC remains stable around the $50,000 mark. The continued correlation between the two cryptocurrencies and the narrative surrounding the Bitcoin halving suggest that BCH is likely to maintain support above the psychological level of $250 and potentially rebound early.
Bullish Signals from Crypto Whales in Bitcoin Cash (BCH)
Recent on-chain data confirms the continued bullish sentiment towards BCH, with crypto whales showing no signs of backing down despite the recent double-digit price pullback. Instead, they are actively buying the dip.
The Santiment supply-held by addresses chart provides real-time insights into changes in the number of coins deposited in large-holder wallets. Analysis reveals that whales holding balances of 100,000 BCH (equivalent to approximately $250,000) have been consistently accumulating BCH during the price downturn.
Bitcoin Cash (BCH) Whales Wallet Balances vs. Price | Source: Santiment
When BCH reached its peak price of $293 on Feb 14, whale wallets held a balance of 7.81 million BCH. However, as prices began to decline, these whales swiftly took action to capitalize on the opportunity to buy the dip.
Since Feb 14, these whales have accumulated an additional 130,000 BCH, increasing their balances to 7.94 million BCH as of Feb 18. This acquisition is valued at approximately $36 million based on the 10-day simple moving average price of $269 per coin.
The significant increase in whale buying activity signals a strong belief in BCH’s future potential, which could ultimately influence retail investors to follow suit.
Bitcoin Cash (BCH) Price Outlook: Whale Activity and Resistance Levels
Analyzing whale buying trends and the recent correlation with BTC, the outlook for BCH price appears favorable for an imminent rebound in the upcoming week.
Targeting Higher Price Levels: Having breached the $290 barrier on Feb 14, bullish sentiment suggests that the next rally could propel BCH price higher, potentially surpassing the $300 territory.
Short-Term Resistance and On-Chain Metrics: In the short term, BCH bulls face significant resistance at the $280 area, as indicated by IntoTheBlock’s in/out of the money metric, which groups existing BCH holders based on their entry prices.
Potential Sell-Off and Breakout Scenario: With 145,620 addresses holding 1.17 million BCH at an average price of $276, a wave of sell-offs from these holders could hinder BCH from reclaiming the $280 territory. However, continued bullish whale buying activity may trigger a decisive breakout above this resistance level, paving the way for a retest of $300.
Bearish Scenario and Support Levels: Conversely, bears could disrupt the bullish narrative by forcing a reversal below $220. Nonetheless, a strong buy-wall at the $250 area, with 131,730 addresses holding 1.71 million BCH at an average price of $249, is likely to prevent such a scenario. Frantic covering purchases from these investors could fuel a significant rebound.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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