Connect with us

Bitcoin Cash

Bitcoin Cash [BCH]: Despite rally, on-chain activity tells a different tale

Published

on

Source: Unsplash


Trading at above $24,000 at press time, the king coin Bitcoin (BTC) appreciated by over 20% in the past month. Understandably, the rest of the market followed its lead, with most cryptos hiking too.

Bitcoin Cash (BCH) was no exception to the same, rallying by 40% in the last 30 days.

Price goes right, volume goes left

At the time of writing, BCH was trading at $145.92. 30 days ago, the same was pegged at $105. 

On the daily chart, the altcoin’s Relative Strength Index (RSI) and Money Flow Index (MFI) also rose steadily as the crypto’s value appreciated. The RSI and MFI went as high as 69 and 77, respectively, during a 30-day window. These key indicators have, however, pictured a drawdown over the past few weeks.

Still housed above the 50-neutral zone, the RSI was spotted at 59 and the MFI at 54. With the bulls still on a prowl, the 20 EMA was spotted below the price. In fact, it has been so since 28 July. 

Source: TradingView

In the 30-day period under review, trading activity on BCH’s network declined. As the price embarked on a rally, the altcoin’s trading volume went south, declining by over 75%.

This price/volume divergence is unusual in a healthy market. When such a disparity exists between the price and volume of a coin, it is usually indicative of a decline in the coin’s accumulation and exhaustion among coin buyers.

Source: Santiment

More bad news?

Despite the hike in price, BCH failed to register any significant growth on its network in the last 30 days. The same was highlighted by data from Santiment recently. Furthermore, daily active addresses on the network declined by 63% too. 

Source: Santiment

On 28 July, BCH was trading at a high of $155.80. This led to a spike in transaction volume the following day. As a result, the aggregate number of BCH coins involved in all the transactions completed on 29 July jumped by over 350%.

However, this rally was immediately followed by a downturn, one that forced transaction volume to a low of $26 million. This, despite the price rallying on all other fronts. 

Source: Messari

With a positive value of +6.21%, the 30-day MVRV underlined that some BCH holders had made a profit over the past month. However, in light of the positive correlation with the king coin, the speculation as to whether the bottom is in will impact BCH too. 

Ergo, any significant drop in the price of BTC might just have a negative impact on the price of BCH.

Read the best crypto stories of the day in less than 5 minutes

Subscribe to get it daily in your inbox.


Please select your Email Preferences.

Abiodun is a full-time journalist working with AMBCrypto. He is also a lawyer with over 2 years of experience. With a keen interest in blockchain technology and its limitless possibilities, Abiodun spends his time understanding the technology, building projects, and educating people about it.

Click to comment

Leave a Reply

Your email address will not be published.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.