After delivering triple-digit gains in June, Bitcoin Cash (BCH) started July on a negative note with a 13% price correction. On-chain data shows that Bitcoin Cash whales are now taking hawkish positions. Will it trigger a major retracement toward $250?
Bitcoin Cash made a splash in June, posting gains in excess of 150% as it soared above $300 for the first time since May 2022. However, the bears are now making attempts to seize control in July.
Bitcoin Cash Whales Cool on Buying Positions
According to on-chain data, the cluster of Bitcoin Cash whales holding 1 million to 10 million coins played a pivotal role in the June rally. Between June 21 and June 30, they bought a whopping 170,000 BCH coins worth approximately $52.4 million.
But remarkably, since the start of July, they have conspicuously stopped buying. Pointedly, between July 1 and July 4, their total BCH balances have remained around 1.51 million coins.
The Whales Wallet Balances metric evaluates the trading sentiment among large institutional investors by tracking real-time changes in the number of tokens they hold.
When whales buy more coins, the asset price often rises due to their financial power and strategic influence on other investors.
As seen above, the massive accumulation frenzy among this whale cohort played a critical role in the June price rally. With them now taking a hawkish stance, it is no surprise that the BCH growth trend has flattened.
If the whales hold their neutral stance longer, it’s only a matter of time before other investors could interpret it as a bearish signal.
BCH User Activity is in Decline
In a more bearish turn of events, user activity across the Bitcoin Cash ecosystem has been dropping persistently over the past week. On June 29, the Bitcoin Cash network recorded 376,000 active users at a recent high.
However, as of July 4, the Santiment chart below illustrates how BCH Daily Active Addresses have dropped 23% to 309,000.
The Active Addresses (7d) measure changes in user activity by tracking the daily number of unique wallet addresses carrying out transactions.
When it drops, a bearish signal suggests the asset could struggle to attract new demand in the coming days.
Hence, in addition to the neutral stance among the Bitcoin Cash whales, the mass market retail participants also appear to be cooling their interest in BCH this week. If this trend persists, the BCH price could drop below $250.
BCH Price Prediction: Bears Could Force a Pullback Below $250
Given the factors mentioned above, the Bitcoin Cash whales could force a pullback below $250 if they turn bearish. However, the bulls will offer some support at around $265. At that zone, 147,000 investors that bought 564,000 BCH at the maximum price of $267 could prevent the slump.
But if bearish momentum strengthens and that support level caves, BCH could drop below $250 eventually.
Bitcoin Cash (BCH) Whales, June 2023. | Active Addresses (7d) – Source: IntoTheBlock
Still, Bitcoin Cash the bulls could push ahead with the rally if the BCH price can rebound about $300 again. However, the 234,000 investors that bought 421,000 BCH coins at the maximum price of $296 could trigger a pullback.
But if the resistance level does not hold, then BCH could hit a new 2023 peak of $330.