Bitcoin Cash did not drop below the $230 support level last week, preventing a significant price decrease. On-chain data provides insights into potential price movements if support is lost. However, long-term investors continue to sell their holdings.
Long-Term Investors Selling BCH
Bitcoin Cash drew attention to sufficient network demand to support the bull rally that saw prices reach $320 towards the end of June. However, on-chain data indicates that long-term investors are still withdrawing their investments, which has caused a decline in BCH price. The trend of profit-taking among investors has not diminished by mid-August.
Age Consumed evaluates changes in long-term investors’ buying and selling activities by multiplying the number of days since tokens were last moved. This week, a three-digit increase in Age Consumed suggests that many long-term investors are still cashing out. If this trend continues, it could hinder a significant price recovery for BCH bulls.
Sales Being Met by BCH Buyers
Bitcoin Cash maintained significant network demand after reaching enthusiastic price peaks in June. According to Relative Strength Index (RSI) data confirming this stance, the price momentum of BCH remains largely neutral despite downward pressures resulting from long-term investors reserving profits. As shown below, BCH’s daily RSI has remained in the mid-40s, indicating relatively balanced price movements since the beginning of August.
Relative Strength Index evaluates the strength and momentum of a current price trend. RSI values above 70 and below 30 are considered critical overbought and oversold levels, respectively. When RSI hovers in the mid-40s, as observed above, it indicates relatively balanced recent price movements.
Clearly, as long-term investors sell, other strategic BCH network participants accumulate new demand. Therefore, without significant bias towards buying or selling pressure, Bitcoin Cash is expected to stay above the $200 support level.
Input/Output Money Around Price (IOMAP) data, which illustrates the distribution of buying prices among current owners, also supports this bullish price prediction. As shown in the graph below, 39,000 addresses have purchased 1.41 million BCH tokens at an average price of $217.51. This group of owners presents the most significant supply wall around the current 20% price range.
However, if momentum turns positive, BCH bulls could enter a recovery zone towards the $280 region. In this case, a pullback may be triggered by the 164,000 addresses that have purchased 1.31 million BCH tokens at an average price of $240.
