Bitcoin Cash Starts July with a Price Correction as Whales Take Hawkish Positions

Bitcoin Cash (BCH), one of the prominent cryptocurrencies, began the month of July on a slightly negative note and has recorded a jarring 24% price correction after delivering an impressive rally throughout June. 

That said, the market dynamics surrounding Bitcoin Cash are being closely observed as on-chain data reveals a shift in sentiment among Bitcoin Cash whales, while mining metrics indicate increased interest in the network. Traders, however, faced unexpected losses as BCH futures witnessed a sudden price leap.

Whales Pause Accumulation, Raising Questions

Bitcoin Cash’s rally to a new two-year high in June was primarily fueled by the accumulation of BCH coins by large holders, commonly known as whales. These influential players, with holdings ranging from 1 million to 10 million coins, played a pivotal role in driving up the price of Bitcoin Cash. However, July has brought about a noticeable change in their behavior, as these whales have momentarily halted their buying activity. 

The period between July 1 and July 4 witnessed a relatively steady total BCH balance of around 1.51 million coins for these prominent investors. The pause in accumulation by Bitcoin Cash whales has sparked speculation and raised questions about the medium-to-near-term price action of the market.

Bitcoin Cash Starts July with a Price Correction as Whales Take Hawkish Positions.
Bitcoin Cash Starts July with a Price Correction as Whales Take Hawkish Positions. Image Source: Santiment

Bitcoin Cash Hash Rate Surges, Bolstering Network Security

In a positive development for the Bitcoin Cash network, the hash rate, which measures the computing power dedicated to mining, has reached its highest level in over two years. Data from CoinWarz reveals that the BCH hash rate surpassed 5.45 EH/s in the closing hours of June.

This surge in hash power not only enhances the overall security of the Bitcoin Cash blockchain but also signifies a growing interest among miners. As more miners join the network, the increased hash rate strengthens the network’s ability to resist potential attacks and ensures the integrity of transactions. 

This significant rise in mining activity also resulted in a rapid increase in mining difficulty, reaching a level of 494.8086 G within a day. 

Image source: CoinWarz

While frequent difficulty adjustments may impact short-term mining profits, the heightened interest in mining Bitcoin Cash is an encouraging sign for the network’s long-term growth and sustainability.

Short-Selling Pressure Intensifies as BCH Futures Rally

While Bitcoin Cash experienced a substantial price increase, BCH futures traders faced unexpected losses, the highest recorded in over two years. According to data from Coinalyze, traders suffered losses totaling over $25 million. 

Interestingly, this significant drop occurred concurrently with the sudden price leap that propelled BCH to the $329 mark. Both short and long positions on BCH futures were significantly impacted, suggesting that these losses may have played a role in triggering the sudden price spike.

That said, BCH futures are currently exhibiting negative funding rates. This implies that short traders currently outnumber long traders, as short traders are paying long traders to maintain their positions. 

BCH Skating on Thin Ice

As of the time of making this report, BCH has recorded a gutting 24% drop to the critical $250 support level, which signals more price corrections to come. 

However, this corrective trajectory could change if the cryptocurrency manages to hold itself above the $250 mark. Failure to do so could quickly lead to further downward trading towards the $220 to $200 axis. 

BCH/USD Daily Chart from TradingView

On the flip side, price sustenance above $250 could help the cryptocurrency gradually recover its $300 handle once again.

BCH Statistics Data

Current BCH Price: $258

BCH Market Cap: $5B

Circulating Supply of BCH: 19.4M

BCH Total Supply: 21M

BCH Market Ranking: #14

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