Surge in Large Bitcoin Cash (BCH) Transactions: Can it Target $250?
[TL; DR]
In June the listing of BCH on EDX Market cryptocurrency exchange pushed its price above $300.
There was a positive relationship between the increase in BCH transactions and its price rise.
If the BCH price momentum increases its value may reach $250 in coming weeks.
Introduction
The price of Bitcoin Cash (BCH) had been suppressed for over a year until it spiked in June. From the last half of 2022 into 2023 the BCH price was fluctuating between $100 and $150. However, in June its price rose above $300. Sadly, it could not maintain that momentum as it dropped again. This analysis looks at the potential of BCH to attain $250 within a few weeks.
Bitcoin Cash Bulls Safeguard the $180 Support Level
Most cryptocurrencies were heavily affected by the crypto flash crash that occurred during the mid-August period. For example, a 37% increase in BCH transactions ensured that its price remained firm within the third week of August. On the other hand, a 1,500% spike in large transactions enabled BCH to get into the recovery zone. In fact, Bitcoin Cash price has been above $180 since its sharp spike in June. The following graph shows BCH’s price moves since that time.
BCH Price since June- CoinGecko
As the diagram depicts, the BCH price surged between 20 and 30 June and has remained fairly high since then. At the time of writing, it is trading at $200.51.
The Reason behind BCH’s Recent Price Recovery
BCH’s favourable price movement is connected to its recent listing on EDX Market, a Wall Street-backed crypto exchange. In fact, industry giants Citadel Securities, Schwab and Fidelity are the firms that back EDX Market, a platform that caters for institutional investors.
In short, investors have interpreted EDX Market’s selective listing of Bitcoin, ETH, BCH and Litecoin as an endorsement of their significance in the cryptocurrency space. More importantly, EDX Market has selected these four digital assets as they believe that they comply with the requirements of the United States Securities and Exchange Commission (SEC).
A crypto analyst by the name TheTieIO said, “EDX is still new, and its trading volume is relatively small compared to major exchanges like Binance, however this new enthusiasm for $BCH is evident in trading volume on Binance as well. $BCH trading volume on Binance has reached levels unseen in the past two years.”
Also, on August 23 EDX Market announced a special partnership with Anchorage for its custody services. This further created confidence in its trading services.
Nonetheless, what is vital to note is that the value of BCH surged above $300 following the news of its listing on EDX Market. From that time till now the higher time frame charts show BCH’s bullish momentum. However, the lower time frame charts indicate a fading bullish sentiment.
A Surge in BCH’s Transactional Activity gives it Additional Impetus
The increase in BCH transactions since July helped to prop up its price. For instance, it registered transactions worth more than $100,000 on 7 August. That large scale movement attracted much attention from BCH investors. The following graph shows the increase in BCH transaction activity.
Increase in BCH Transaction Activity - Santiment
As the diagram indicates BCH recorded an increase in transaction during the fourth week of August. For instance, the BCH whale activity increased from 4 transactions on 20 August to 64 on the 23rd of the same month. Further to this, during the same period the price of BCH rose by 3% from $185 to $192.
In addition, some volume indicators showed that during the first two weeks of August there was much demand that would drive the price of BCH higher. That is the reason why the $250-$260 resistance zone has been critical since June.
From June to date the increase in BCH transaction activity has been significant as it has been accompanied by noticeable price rises. Therefore, the buying pressure and liquidity which crypto whales are providing may help BCH to surpass the $200 resistance level.
Another factor that recently contributed to Bitcoin cash price rise was the short squeeze and the surge in trading volume on Upbit, a South Korean exchange. Basically, a short squeeze takes place when the price of an asset rises, forcing some traders who had bet against its price to cover their trading positions at loss to prevent forced liquidations.
BCH Enters a Recovery Zone
After August’s altcoin market crash BCH entered a recovery zone. This is because by 24 August its Relative Strength Index (RSI) crossed above 30 and settled at 34. When the RSI rises above 30 it indicates a bullish momentum. The next diagram illustrates the situation.
BCH RSI Indicates a Recovery Zone - TradingView
As The Graph indicates, the RSI reading dropped below the 30 mark for a few days. However, within a short period it rose above 30 again, indicating renewed momentum.
Read also about the difference between bitcoin and bitcoin cash
BCH Price Prediction
Some analysts believe that if the general crypto market sentiment turns bullish the price of BCH may surge towards $250 within the next few weeks. Recently, the In/Out of Money around Price data confirmed a bullish BCH price trend. It showed that BCH will face little resistance until it reaches $220.
Nevertheless, if the 56,320 BCH holders who purchased 1.47 million coins at an average price of $220.85 exit their positions its value may tumble. On the other hand, if the whales increase their buying pressure its price may rise above the $250 resistance level.
If the BCH price trends downward due to increased bearish pressure its value may drop below the $180 support level. Nonetheless, the 89,760 wallet addresses that acquired 312,190 BCH at an average price of $190 may offer stiff support. If the bears breach the $190 support level we may witness another BCH price recovery zone. Continued selling pressure will likely force the price below $180.
Read also: BCH Price Prediction & Forecast for 2023, 2025, 2030
BCH Price Prediction 2024
CoinCodex shows that BCH is currently bearish. Worse, it has a Fear & Greed Index reading of 40 which shows that there is much fear in the market. On the other hand, its current RSI reading is 42.98, showing a neutral market sentiment.
With this trend, the BCH price is likely to range between $184.37 and $232.42 in December 2023. And by the end of 2024 it should fluctuate between $141.91 and $202.81.
Conclusion
The price of Bitcoin Cash surged above $300 in June after it was listed on EDX Market crypto exchange. Ever since that time it has been trading above $180. Nevertheless, if it maintains a high bullish momentum its value may rise toward $250. During August there was an increase in its transaction activity.
