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.
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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.
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