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Bitcoin Cash (BCH) price went from $494.30 on June 7 to a low of $314.24 on July 8. However, according to recent data available to BeInCrypto, the decline may not be over.
BCH trades at 343.09, with bulls eyeing a break past the upper-level resistance at press time. Here’s what on-chain analysis alongside the technical side tells about the coin’s next move.
Bitcoin Cash HODLers Decamp from Previous Site
One metric indicating a drawdown in Bitcoin Cash’s price is the Dormant Circulation. This metric shows the number of coins involved in transactions during a period that has not been moved for a long time.
When circulation spikes, many idle coins are transacted. However, a decline implies that coins have remained stagnant.
As of this writing, data from Santiment shows that the BCH 90-Day Dormant Circulation had jumped to 18,200, suggesting that many old coins are moving to new wallets.
Read More: 7 Best Bitcoin Cash (BCH) Wallets in 2024
This movement could be attributed to the recent BCH distribution by the defunct exchange Mt. Gox. In most cases, a rise in the metric means holders are sending coins to exchanges, and the aftereffect could be a notable decline.
A rhyming pattern of this potential can be traced to July 5, when dormant coins became active. At that time, Bitcoin Cash traded around $341.62. But two days later, the value had decreased to $300.86.
If this pattern repeats itself, BCH’s price may drop by 10% within the next few days. Beyond coin circulation, network activity is another indicator pointing to a price decrease.
According to IntoTheBlock, the number of new and active addresses on Bitcoin Cash’s network has decreased in the last seven days. This decline highlights the project’s lack of traction and the cryptocurrency’s lack of increased adoption.
Furthermore, this decrease implies a drop in demand for BCH. If sustained, it can drive a notable drop in value.
BCH Price Prediction: A Hurdle Waits in Front
At press time, bulls seem to be defending the $317.08 supporting while eyeing a pump into the resistance at $396.41.
However, the On Balance Volume (OBV) shows that it may be challenging to reach the resistance point. This is because the OBV detects if trading volume is positive or not. If the OBV increases, it means that the trading volume has more buy orders than the coins sold.
If the indicator decreases, it implies a rise in selling volume. This is the situation with BCH. The Parabolic Stop and Reverse (SAR) indicator also supports this.
Typically, if the dotted lines of the Parabolic SAR are below the price, the price can continue to increase. But since they are above it in BCH’s case, the coin’s value may be set to drop below $330 in the short term.
Read More: Bitcoin Cash (BCH) Price Prediction 2024/2025/2030
However, if bears are not strong enough and bulls reject the move, a bet to the upside may be profitable. If this is the case, BCH’s price can head toward $400.