Bitcoin Cash (BCH) price has not been able to capitalize on the recent network upgrade despite investors’ expectations. The on-chain data reveals the crucial factors that invalidated the bullish BCH price prediction. The question now is, how long will the downtrend last?
On May 16, Bitcoin Cash (BCH) completed another successful “Cash Tokens” network upgrade, which will add NFTs and smart contracts to the Bitcoin Cash ecosystem. However, instead of a BCH price spike as expected, BCH has fallen into a downtrend with miners selling and long-term holders booking profits. Investors are now wondering how long the bearish outlook will persist.
Bitcoin Cash Miners are Offloading their Reserves
Miners on the Bitcoin network appear to be bearish, selling off their block rewards. The BCH Miner Reserves data from IntoTheBlock, which evaluates the number of coins held in the wallet addresses of recognized miners and mining pools, shows that BCH miners have sold over 550,000 coins between April 29 and May 23. At the current market value of $113, the coins sold during the past month are worth more than $62.15 million. The persistent sell-off appears to be a significant driver behind the recent Bitcoin Cash price retracement.
As BCH miners hold about 2.8% of the total Bitcoin Cash circulating supply, this selling pressure among miners could cause other strategic investors to turn bearish themselves over the coming days.
Long-term Holders Have Been Selling This Week
This week, long-term investors on the BCH network have increased their selling activity, further confirming the general bearish sentiment surrounding the Bitcoin Cash ecosystem at the moment. The Santiment chart below shows that BCH Age Consumed has increased progressively since May 20. Age Consumed evaluates the number of recently moved coins multiplied by the number of days spent in their previous wallet addresses. Between May 20 and May 23, Age Consumed has risen from 12,929 to 4.8 million. When Age Consumed rises, as seen above, it indicates that long-term holders are increasingly selling off their tokens.
Considering that long-term investors hold about 59% of the total BCH circulating supply, a prolonged selling frenzy among them could see the BCH market get saturated with sell orders.
Miners and long-term investors play a significant role in the viability of any blockchain ecosystem. A prolonged selling action among them could signify more imminent BCH price downswings.
BCH Price Prediction: Will it Drop to $100?
IntoTheBlock’s In/Out of the Money data shows that the $115 resistance could prove too strong for the bulls. With the current market dynamics and the above components making the price prediction more likely, the BCH price could decline towards $100. However, the bears could face stiff competition from the 284,000 bullish investors who bought 383,000 BCH at an average price of $110. If the bears breach the $110 support level, Bitcoin Cash price will probably drop to $100.
If the bulls managed to invalidate the bearish Bitcoin Cash price prediction and break above the critical $115 resistance, the bullish sentiment could continue. However, the potential sell-off pressure from the 463,800 investors who bought 2.15 million BCH at an average price of $116 could trigger a pullback. If the price manages to break the $115 resistance, BCH could reclaim the $120 milestone.
Disclaimer
This article is for informational purposes only and should not be considered financial or investment advice. Bitrabo provides accurate and unbiased reporting, but market conditions are subject to change without notice. Do your research and consult with a professional before making any financial decisions.
