Bitcoin Cash (BCH) faces the risk of correction despite increased whale activity.

Bitcoin Cash (BCH) is currently trading around $486.2, recording a slight fall of 0.23% in the past 24 hours. Not long ago, on July 1st, BCH surged to reach $526.5 – the highest peak in 8 months – due to the wave of optimism spreading across the market, significant speculative inflows, along with notable accumulation activity from whales. In just three months, the price of BCH has jumped over 75%, marking one of the most impressive recoveries in the altcoin group.

The breakout is also reinforced by a surge in trading volume, with over 120,000 BCH traded in just 24 hours – three times the average. The trend of shifting capital towards mid-cap coins, as investors seek profit opportunities outside the large-cap asset group, has contributed to pushing the price of BCH higher in the short term.

However, the on-chain indicators are not very promising. The number of active BCH addresses has fallen to the lowest level in 6 years, indicating that the recent price increase has largely been driven by speculation rather than actual usage demand. Nevertheless, the technical signals still reveal growth potential. At the end of June, BCH formed a "golden cross" – when the 50-day simple moving average (SMA) crosses above the 200-day SMA – which is often seen as a sign of upcoming sustainable upward trends.

Golden cross on the daily chart of BCH/USDT | Source: TradingView Additionally, open contracts in the BCH derivatives market increased by 27.4% over the past week, reaching 578 million USD – a clear testament to the speculative inflow of funds continuing.

On July 4th, data analysis company IntoTheBlock recorded a large number of transactions from "whales" — each transaction worth over $100,000 — which surged by 122.45%, equivalent to 957,440 BCH, with a total value of about 482 million USD. This sudden explosion is reminiscent of similar activity in February, May, and late June, all of which preceded strong market fluctuations.

Just one day later, on July 5th, the market witnessed a particularly noteworthy event: a transaction of 10,000 BCH ( approximately 5 million USD) was executed just before 80,000 BTC that had not been active for many years were suddenly moved — worth over 8.5 billion USD. Some experts suggest that the aforementioned BCH transaction could serve as a test of wallet access, preparing for the largest movement of old BTC in over a decade.

On another note, on July 1st, the Bitcoin Cash Foundation announced the software update Knuth v0.68.0 — merging the source code of the network nodes while laying the groundwork for future improvements in UTXO management efficiency. Although it has not yet created an explosion in terms of application, small community projects continue to experiment with BCH in micro-payments and NFTs. Meanwhile, Roger Ver — a long-time supporter of BCH — still persistently promotes this coin as an alternative scaling solution to Bitcoin, although recently he has not introduced any notable initiatives aimed at organizational blocks.

Technical Analysis

On the daily time frame, the chart shows that the BCH/USDT pair has created a false breakout at the important resistance level around $500 ( marked by the red circle ). This is a typical signal of a bull trap – often a precursor to deep corrections.

Daily BCH/USDT chart | Source: TradingViewIn addition, the daily RSI indicator is forming a bearish divergence and starting to slope downwards, indicating that selling pressure is increasing and bears are gradually regaining control.

With these technical signals, it is highly likely that the price of BCH will reverse and head towards the nearest strong support zone around the $440 mark in the coming sessions.

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