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Bitcoin Cash (BCH) Price Reclaim $600 after Ethereum ETF Approval?

source-logo  thecryptobasic.com 25 May 2024 04:08, UTC

Bitcoin cash price rebound 5% to reclaim $490 on May 24, recent movements observed among BCH whales suggests more upside could follow.

Ethereum ETF Sell-the-News Sends BCH Price Spiralling 8%

BCH price descended into an 11% tailspin over the last 72 hours before rebounding 5% to reclaim the $490 territory on Friday evening at 5 pm CET.

The Bitcoin Cash price volatility comes on the back of Ethereum ETF approval by the SEC on May 23, which sent swing traders and paper-hand investors into a “sell-the-news” frenzy.

Bitcoin Cash BCH Price Action after Ethereum ETF Approval

The “sell-the-news” concept is popular contrarian strategy in crypto trading where investors rapidly sell-off their holdings right at the cusp of a major bullish news event, lock-in early profits before the euphoria fades out, then buying at lower prices.

This narrative appears to have played out in the BCH markets over the last 24 hours. As seen in the chart above. After the Ethereum ETF official approval verdict on May 23, BCH price tumbled 11%, dropping to a weekly low of $472. But within hours, BCH price has rebounded 5% to reclaim $490 level.

Whale Investors Reacted with 10,000 BCH Acquisition

However, on-chain data shows that the “sell-the-news” wave was mainly restricted to swing traders and retail investors, while Bitcoin Cash whale investors maintained a bullish stance.

The Santiment chart below tracks the number of coins in custody of whale wallets holding balances of at least 1,000 BCH (~$500,000).

Bitcoin Cash Price vs BCH Whales Wallet Balances

The chart above shows that BCH whales held a total of 11.92 million BCH in their cumulative balances as of May 19. But since Bloomberg analysts broke the news of the Ethereum ETF approval on May 20, the whales rapidly increased their buying pressure.

In nominal terms, since May 20, Bitcoin Cash whales have acquired 10,000 BCH, bringing their cumulative balances to 11.93 million.

Valued at the current price of around $493 per coin, the Bitcoin Cash whales have effectively invested approximately $5.2 million.

Typically, when whales start to buy such large volumes of coins within a short period, it put intense bullish pressure on the price of the underlying asset for two key reasons.

Firstly, the significant demand from whales reduces the available supply in the market, driving up prices due to increased scarcity. Secondly, whale accumulation often signals confidence in the asset’s future performance, encouraging other investors to follow suit, further amplifying the price increase.

This dynamic partly explains the rapid 5% rebound in BCH prices observed on May 24. If the whales keep up the buying trend, BCH’s price could ascend towards the elusive $600 target in the coming days.

BCH Price Forecast: $530 Resistance Looming Large

After the 5% rebound recorded after Ethereum ETF approval, Bitcoin Cash price now looks set for another leg-up toward $600. Based on the recent on-chain movements, a continuation of the whales’ $5.2 million buying trend will likely crowd-out the paper-handed swing traders selling into the market euphoria.

The Parabolic Stop and Reverse (SAR) technical indicator also affirms this bullish BCH price forecast. Currently the Parabolic SAR dots are pointing towards $454 level which is far-below the current BCH price at $493.

Bitcoin Cash Price Forecast BCHUSD

This alignment occurs when the markets are in a strong uptrend, providing a solid support level that could prevent significant downward movement.

On the flip side, the previous market top at $530 could form a key short-term resistance level. If BCH can break through this resistance, it would likely attract additional buying interest, likely propelling the price toward the $600 target.