- Bitcoin Cash has seen a reversal in its bullish market structure in recent months.
- Whales have not yet begun to build up their reserves.
Bitcoin Cash (BCH) was trading at $259 on February 23rd. It hit a local high of $529.2 on March 3, and at the time of reporting, the price had fallen to $417.
This run could play out similarly to how the previous rally in July 2023 played out.
The $500 level was a technical and psychological resistance level. BCH hit a milestone by reaching a price level not seen since December 2021, although it was rejected just above this level.
Two sets of Fibonacci levels to solve the riddle
Source: BCH/USDT on TradingView
In June 2023, Bitcoin Cash rose 264% from $90.3 to $329.
The Fibonacci level shown (light yellow) shows that the 61.8% retracement level was tested 48 days after the then local high was registered.
The BCH price then consolidated between the $210 and $260 levels over the next 133 days.
There have been a few breakout attempts above $260 in the meantime, but a sustained break and retest of $260 only occurred in late February. Moreover, the recent rally broke the 61.8% extension level of $476.
Likewise, it is likely that Bitcoin Cash will fall to $337.6 in the next two months.
In 6 months or more, there is a possibility of a move towards $720, which is a 61.8% extension of the current Fibonacci level (dashed turquoise line).
Accumulation has not started yet
Source: Santiment
The MVRV ratio rose almost the same as in June 2023, showing that holders have made huge profits.
The average coin age has been trending downward since mid-December, when BCH’s market structure was strengthening.
Holders who received this signal have been selling their assets even though the price has risen. Investors will want to see this indicator trend higher once before seeing an accumulation.
The total number of holders decreased from 26.55 million on February 15 to 25.87 million on March 11.
This was another sign that holders were profiting as prices rose.
Source: Santiment
It was interesting to look at the distribution of supply by number of addresses. The number of wallets holding less than 1000 BCH has been trending downward over the past month.
Addresses holding between 1,000 and 100,000 BCH have also fallen since mid-January.
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Two months after the June rally, the number of addresses holding between 1,000 and 100,000 tokens increased further. This suggests that whales accumulate during the integration phase.
In the coming months, investors may watch for a surge in this indicator to add to the bullish argument.