Bitcoin Cash [BCH]: Despite the rally, activity on the chain tells a different story
Trading at over $24,000 at press time, the king coin Bitcoin (BTC) appreciated by over 20% in the last month. Understandably, the rest of the market followed its lead, with most cryptos hiking as well.
Bitcoin Cash (CHF) was no exception to the same, increased by 40% in the last 30 days.
Price goes to the right, volume goes to the 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 increased. The RSI and MFI went as high as 69 and 77 respectively during a 30-day window. However, these key indicators have depicted a decline in recent weeks.
Still positioned above the 50 neutral zone, the RSI was observed at 59 and the MFI at 54. With the bulls still on the hunt, the 20 EMA was spotted below the price. It has actually been like this since July 28.
Source: TradingView
During the 30-day period under investigation, trading activity on BCH’s network dropped. As the price began to rally, the altcoin’s trading volume went south, falling by over 75%.
This price/volume difference is unusual in a healthy market. When such a difference exists between the price and volume of a coin, it is usually a sign of a decline in the coin’s accumulation and exhaustion among coin buyers.
Source: Sentiment
More bad news?
Despite the price increase, BCH failed to register any significant growth on the network in the last 30 days. The same was highlighted by data from Sentiment recently. In addition, the daily active addresses on the network decreased by 63%.
Source: Sentiment
On July 28, BCH traded at a high of $155.80. This led to an increase in transaction volume the following day. As a result, the total number of BCH coins involved in all transactions completed on July 29 increased by over 350%.
However, this rally was immediately followed by a decline, one that forced transaction volume to a low of $26 million. This despite price increases on all other fronts.
Source: Messari
With a positive value of +6.21%, the 30-day MVRV highlighted that some BCH holders had profited over the past month. However, in light of positive correlation with the king coin, the speculation about whether the bottom is in will also affect BCH.
Ergo, a significant drop in the price of BTC can only have a negative impact on the price of BCH.
