Bitcoin Cash (BCH), a prominent altcoin in the cryptocurrency market, has experienced a modest 10% weekly gain, despite double-digit weekly gains. This is due to a month-long selling frenzy among BCH miners, which has resulted in a substantial reduction in their reserves.
Bitcoin Cash: The Miners’ Selling Frenzy
BCH miners have been offloading their reserves, with their cumulative balance decreasing from 6.59 million BCH to 5.81 million BCH as of October 25. This means they have sold approximately 780,000 BCH, valued at $199 million at the current market price of $255. This selling activity could impact the supply and demand dynamics of BCH, as it could dilute market supply and exert downward pressure on the price of BCH if it continues over a prolonged period.
Bitcoin Cash: Impact on Price Performance
The decline in BCH miner reserves has unsurprisingly affected the price performance of the cryptocurrency. While the other top 20 assets ranked by market capitalization have been experiencing bullish rallies, BCH has lagged behind with its modest gains. The ongoing selling pressure from miners has limited the upward potential of BCH, putting its price rally at risk.
Bullish whales and accumulation
While miners have been reducing their reserves, there is a glimmer of hope for BCH in the form of bullish crypto whales. On-chain data from Santiment reveals that whale wallets holding 1,000 to 10 million BCH have been accumulating during the same period. These large institutional investors have increased their holdings from 11.66 million to 11.70 million BCH, accumulating approximately 40,000 BCH, which is currently valued at $10.2 million.
Although the whale accumulation is significantly smaller compared to the miners’ sell-off, it can still have a positive impact on the market. An increase in whale balances often instils confidence among retail investors, as it suggests that institutional investors are confident in the future value of BCH and are willing to buy up the excess market supply. If the whales continue to accumulate BCH in the coming days, it could provide the necessary momentum for the price rally to gain traction.
The critical resistance at $280
The BCH price could potentially reach $300 in the coming weeks due to intensifying bullish sentiment in the crypto market. However, a critical resistance level of $280 could pose a significant obstacle. Around 970,320 addresses have bought BCH at an average price of $282, and some may consider taking profits early if the price approaches the $280 resistance. If the bulls break through the $280 resistance, the price rally could head towards $300. If bears force a reversal below $200, they may mount a support buy-wall at $225.
Conclusion
The recent reduction in reserves by BCH miners to a 5-year low has had a significant impact on the price performance of Bitcoin Cash. The ongoing selling frenzy among miners has limited the price rally potential of BCH, while the accumulation by bullish whales provides some optimism for the market. The critical resistance level at $280 will be a key factor to watch, as it could either serve as a launching pad for the price rally or a major obstacle for further gains.
