Aaryamann Shrivastava
FXStreet
- Bitcoin Cash price shot up by over 12% in the past seven days, reclaiming the key support level of $231.
- This increase added to the month's rally, bringing the total rise to nearly 28% over the past months.
- BCH investors hold a pretty optimistic outlook despite the lack of price uptick in August, visible in the growth moted in mid-term holders.
Bitcoin Cash price managed to make a good growth over the past 30 days, which is now translating into profits for the investors. BCH holders have maintained a bullish stance since July, which has kept selling to a minimum, contributing to the rise, which is benefitting them in turn.
Bitcoin Cash price nears two-month high
Bitcoin Cash price, trading at $234 at the time of writing, is set to test the support line at $229, following which a bounce back is expected. This is key for BCH to rally up to $253, which is currently acting as a barrier, breaching which would set the altcoin up for reaching beyond $300 to mark new 2023 highs.
Over the past week, the Bitcoin namesake has risen by more than 12%, which contributed to the increase observed in the past month. Up by 22% in this duration, the altcoin has managed to turn all three Exponential Moving Averages (EMAs) into support levels. The Relative Strength Index (RSI), too, is in the bullish zone above the neutral line at 50.0 but has not slipped into the overbought zone above 70.0. This is a bullish sign which suggests the rally might sustain and hold strength to continue further.
BCH/USD 1-day chart
However, on the off chance that investors decide to book profits following this rise, Bitcoin Cash price could decline. Should it lose the support of $229, a fall to the 50-day EMA is likely, losing which would invalidate the bullish thesis and send BCH toward $182.
Selling is unlikely
Bitcoin Cash price dipping due to profit-taking has a much smaller chance of occurring than a decline due to broader market cues. The reason behind this is the optimism observed in BCH holders over the past couple of weeks. Their loyalty towards the altcoin has significantly contributed to the growth noted in the cryptocurrency's price.
Looking at the distribution of BCH tokens according to time held, it can be observed that in July, nearly 26.5% of the entire circulating supply was held by short-term holders. These investors tend to hold their assets for less than a month.
But starting in August, this concentration decreased, and mid-term holders (investors holding BCH between a month and a year) holdings increased. In the span of two months, this cohort's BCH holding grew from 13% to 33% at the moment. Throughout September, their concentration did not note a decrease.
Bitcoin Cash supply distribution by time
Thus, the short-term traders that matured into mid-term holders exhibit loyalty and bullishness, which is maintained can push Bitcoin Cash price even higher. Furthermore, their sentiment does not exude the willingness to sell, which will also prove beneficial for the altcoin.
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