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The Bitcoin Cash ($BCH) price decline in November has continued this week, as the bears breached the $220 support territory. On-chain data analysis pinpoints the critical factors scuttling the $BCH price recovery prospects.
$BCH price dropped below the critical $220 territory on Wednesday, November 22. As the crypto markets grapple with Changpeng Zhao’s exit from Binance, $BCH appears to be in the run for further downside.
Whale Investors Have Dialed Down their Trading Activity
$BCH listing on EDX markets, a Wall Street-backed crypto trading platform dedicated to corporate investors, was one of the major events that drove Bitcoin Cash price rally to its 2023 peak of $329 in June. But incidentally, on November 1, EDX Markets platform announced the removal of $BCH from its list of supported cryptocurrencies. Since then, Bitcoin Cash has witnessed a significant decline in whale demand, further exacerbating the price downtrend.
On-chain data culled from IntoTheBlock paints a clear picture of this bearish shift in Bitcoin Cash market dynamics in November 2023. The number of $BCH large transactions began to decline around November 2, barely 24 hours after the EDX markets delisting.
As depicted below, $BCH registered 472 Large Transactions on November 2. It has been downhill since then, with the Bitcoin fork project recording a 40-day low of 195 Large Transactions on November 19.
The large transactions metric tracks the trading activity of corporate entities and high net-worth investors on a blockchain network, by aggregating the daily number of transactions that exceed $100,000 in nominal value. Generally, a prolonged decline in large transactions is a bearish signal. It implies that crypto whales are growing disinterested and contributing lesser economic value to the network.
A historical view of the chart shows how the $BCH price rally at the end of H1 2023 accompanied a significant increase in whale transactions. Therefore, it logically follows that the ongoing decline in whale demand could be a precursor to more $BCH price downside.
Bitcoin Cash Miners Have Sold $50M Reserve Coins in November
Mirroring the whales, miners, and node validators on the Bitcoin Cash network have also taken on a negative disposition since the EDX markets’ delisting. This further adds credence to the bearish $BCH market outlook.
Pointedly, the Miners held a total of 6.46 million $BCH in their cumulative reserves as of November 2. However, they halted their month-long accumulation trend and flipped into sell-off mode almost instantly. At press time on November 22, the miner reserves had dwindled by 230,000 coins to hit 6.23 million $BCH.
Valued at the current price of $219, the 230,000 $BCH recently offloaded by the Miners is worth approximately $50.4 million.
The miner reserves metric measures the total amount of assets in the custody of recognized miners and mining pools. When miners initiate a sell-off of their block rewards, strategic investors interpret it as a bearish signal. And historically, $BCH price has often struggled when the miners start selling.
Firstly, such a significant increase in miners’ selling activity adds to the overall $BCH market supply, exerting downward pressure on price. Secondly, it indicates a lack of confidence in future price prospects, reflecting a cautious sentiment within the mining community.
In summary, there’s a dominant bearish sentiment among the major stakeholders within the Bitcoin Cash ecosystem. If the miners keep selling and the whale demand continues to weaken, $BCH price recovery prospects remain bleak.
$BCH Price Prediction: Losing $200 Support Level Could Trigger Bigger Losses
Bitcoin Cash price looks set for a further retracement from a fundamental on-chain perspective. The In/Out of the Money (IOMAP) data, which is an on-chain representation of current $BCH holders’ historical entry prices, also confirms this negative outlook.
It, however, shows that the bears could face an uphill task at the $200 support territory. As depicted below, 126,230 addresses had bought 286,410 $BCH at the minimum price of $203. If they defend their positions fiercely, this could effectively prevent a larger price correction, as predicted.
But if the support level fails to hold, $BCH’s price could drop as low as $180.
Alternatively, the bulls could invalidate that prediction if the whales flip bullish and drive the Bitcoin Cash price above $300. In that case, the initial resistance wall at $240 could pose a challenge.
The chart above shows that 133,570 addresses currently hold 2.9 million $BCH bought at the maximum price of $239. And without a significant increase in whale demand, Bitcoin Cash price is unlikely to clear that resistance.