Here’s the Reason Bitcoin Cash (BCH) Price Might Drop to $400
Bitcoin Cash (BCH) price is attempting to reach its yearly high; however, it seems unlikely to happen. Various factors contribute to this bearish expectation, but there is a possibility to turn it around if BCH manages to convert a critical level into support.
One factor that could impact BCH’s price is the activity of whales. These large wallet investors have the power to influence price direction. In the past, their selling has caused corrections, while accumulation has led to rallies. Currently, whales holding between 1,000 to 10,000 BCH have been consistently selling since the beginning of March. In the previous week alone, around 50,000 BCH worth over $25 million were sold. This selling activity suggests a potential bearish outcome.
Furthermore, even retail investors are likely to start selling their BCH holdings. The Market Value to Realized Value (MVRV) ratio indicates this. The MVRV ratio measures investors’ profit or loss. With BCH’s 30-day MVRV at 10%, it signals profit, which may prompt selling. Historically, BCH corrections have occurred when the MVRV indicator is between 7% – 17%, which is labeled as a danger zone.
Considering these factors, BCH is susceptible to corrections due to selling, which can happen at any moment.
In terms of price prediction, if selling pressure increases, BCH is likely to fail in testing the $501 resistance level as support, even if it manages to breach it. A decline to $448 would result in BCH losing the 50-day Exponential Moving Average (EMA). Breaking this support level may lead to a drop to $400 or $378, where the 100-day EMA converges.
However, if BCH successfully breaches and tests the $501 resistance level as support, it could invalidate the bearish thesis. In this scenario, BCH might have the potential to rise towards $520.