Home Bitcoin News Bitcoin Cash Struggles to Maintain Momentum After Promising Mid-October Surge

Bitcoin Cash Struggles to Maintain Momentum After Promising Mid-October Surge

Bitcoin Cash

Bitcoin Cash (BCH) recently experienced a notable surge in mid-October, igniting hopes among its supporters. However, this excitement has not been sustained, leading to questions about the current demand for the cryptocurrency. After a strong performance around October 14, BCH has struggled to maintain upward momentum, leaving investors wondering if this is a temporary setback or a sign of deeper issues.

The Mid-October Surge

On October 14, Bitcoin Cash demonstrated a significant price increase, which many interpreted as a bullish signal. A substantial price move in a short period often indicates that large investors, or “whales,” are accumulating the asset, suggesting confidence in its future performance. Following this surge, BCH managed to distance itself from its recent lows recorded in August, giving the impression of a potential recovery.

As of now, BCH is trading at approximately $258.60. Despite the price increase, the cryptocurrency has shown signs of sluggish demand since its mid-month highs. While selling pressure has remained limited, which allowed BCH to retain most of its gains, the overall lack of follow-through indicates that investor enthusiasm may be waning.

Whale Activity and On-Chain Data Insights

The apparent absence of bullish momentum post-surge raises concerns about the sustainability of BCH’s price. The on-chain data suggests that the whales who bought in during the mid-October rally have not yet taken profits, hinting at a continued belief in Bitcoin Cash’s potential. However, this does not guarantee that a further price rally is on the horizon.

Ownership data offers a mixed picture. Holder addresses—the wallets that hold onto their assets for the long term—saw a slight increase from 24.34 million to 24.39 million addresses since September 24. This could indicate some level of accumulation, but the activity level tells a different story.

Decline in Short-Term Trader Interest

Interestingly, the number of “cruiser” addresses, which represent short-term traders, dropped significantly from over 653,710 to 618,460. Similarly, trader addresses fell from 107,640 to 94,820 during the same period. This decline suggests a shift away from short-term speculation towards a longer-term holding strategy.

Despite the increase in Holder addresses, the overall balances of these wallets have seen a minor decrease, from 11.94 million BCH to 11.93 million BCH. This could imply that some long-term holders decided to take profits, further complicating the market outlook.

Conversely, cruiser wallets increased their balances from 6.75 million BCH to 6.8 million BCH, while trader balances dipped from 1.11 million BCH to 1.07 million BCH. These trends do not provide strong evidence of significant accumulation in Bitcoin Cash, suggesting that many investors remain cautious.

Transaction Activity: A Silver Lining?

While demand appears sluggish, Bitcoin Cash recently recorded its highest transaction spike since mid-August. The number of daily transactions surged from around 13,000 on October 20 to over 368,000 on October 21. This sudden uptick in transaction volume could potentially restore some confidence among investors and might indicate increased usage of the network.

However, it remains unclear whether this spike in transactions is directly related to the recent price movements. Investors will be keen to monitor whether this transaction activity continues, as sustained growth in user engagement could lead to renewed interest in BCH.

Conclusion: Should You Buy Bitcoin Cash?

The recent price action and transaction volume of Bitcoin Cash present a mixed bag for potential investors. While the mid-October surge offered a glimpse of hope, the subsequent sluggish demand raises questions about BCH’s near-term prospects. On-chain data shows shifting patterns in ownership and trading activity, reflecting a market that is still trying to find its footing.

For those considering investing in Bitcoin Cash, it’s essential to weigh these factors carefully. The cryptocurrency market remains highly volatile, and BCH’s ability to attract new demand will be crucial in determining its future trajectory. As the market evolves, staying informed and adaptable will be key to navigating these uncertain waters.

Read more about:
Share on

James

James T, a passionate crypto journalist from South Africa, explores Litecoin, Dash, & Bitcoin intricacies. Loves sharing insights. Enjoy his work? Donate to support! Dash: XrD3ZdZAebm988BfHr1vqZZu6amSGuKR5F

Crypto newsletter

Get the latest Crypto & Blockchain News in your inbox.

By clicking Subscribe, you agree to our Privacy Policy.

Get the latest updates from our Telegram channel.

Telegram Icon Join Now ×