Bitcoin Cash (BCH) experienced a strong rebound of 5% to reclaim the $490 level on May 24, following a recent drop in price. The decline was a result of the sell-off frenzy triggered by the approval of an Ethereum ETF by the SEC on May 23. This sell-the-news strategy involved investors selling their holdings just before a major bullish event to secure early profits, with the aim of buying back at lower prices. However, while swing traders and retail investors engaged in this strategy, whale investors in Bitcoin Cash maintained a bullish stance.
Data from on-chain analysis revealed that whale investors, who hold balances of at least 1,000 BCH (~$500,000), increased their buying pressure after news of the Ethereum ETF approval. These whales acquired an additional 10,000 BCH since May 20, bringing their cumulative balances to 11.93 million BCH, equivalent to an investment of around $5.2 million. The significant demand from these whales reduces the available supply in the market, driving up prices due to increased scarcity. Moreover, their accumulation often signals confidence in the asset’s future performance, encouraging other investors to follow suit and further amplifying the price increase.
This whale activity partly explains the rapid 5% rebound in BCH prices on May 24. If the buying trend continues, the price of Bitcoin Cash could potentially reach the elusive $600 level in the coming days. However, there is a resistance level at $530 that may pose a short-term challenge. Breaking through this resistance could attract additional buying interest and propel the price towards the $600 target. The Parabolic SAR indicator also supports this bullish forecast, as it currently indicates a solid support level for BCH at $454.