Should Bitcoin Cash investors choose an average dollar cost strategy
Bitcoin Cash [BCH] experienced one of its most intense bearish seasons in the last three months. It fell below $ 100 for the first time since early 2019- a sign of the heavy load it suffered under recent market conditions.
To put its bearish performance in perspective, Bitcoin Cash once traded as high as $ 1642. This means that at the time of the press it was down by about 93% from a record high.
Interestingly, the macro view of the market has recently revealed the fact that the bears are losing momentum. Consequently, most of the best cryptocurrencies have experienced some bullish relief.
Are the bulls back?
Bitcoin Cash is among the cryptocurrencies that have had some relief after a strong bearish attack in June. BCH fell as low as $ 97 at the end of June, but has since had some upside.
It traded at $ 107 on July 10th. At the time of the press release, however, it was found to swap wallets for $ 104. Nevertheless, it has been supported by significant accumulation since the beginning of July. Oddly enough, any upside has been limited, which means that there is very low bullish pressure.
Source: TradingView
BCH’s recent price action raised hopes of a significant improvement in the coming days. However, there is still a certain risk of more downside if sales and RD&D continue. Well, the short-term outlook can best be determined by looking at data in the chain.
BCH’s supply of whales has fallen significantly in the last five days. At press time, it was at its lowest level in the last 30 days. The number of whale transactions also fell significantly in the same period, compared with the second half of June.
Source: Santiment
While the calculations above confirm the limited short-term price action, the supply distribution provides more clarity. The biggest sellers in the last 30 days have been addresses with between 100,000 and one million BCH. However, the largest buyers in the same period have been addresses with between one million and 10 million BCH.
Any bullish pressure in recent days came from addresses with between 1,000 and 100,000. These addresses recorded a significant increase in the last two days.
Meanwhile, addresses with more than 100,000 BCH registered some outflows between 8 and 10 July. This explains the prevailing bearish pressure. However, their sales have been limited due to the minor price changes.
Source: Santiment
Call for action
Some sales pressure is expected after a significant upside, as some investors are making a profit. However, most of them hold Bitcoin Cash in particular. And this has allowed the cryptocurrency to maintain a level above $ 100.
While this is a good sign, another significant drop in the future is possible. But a big rally means that we may not see such low prices again. In that case, the current price levels are ideal for an average dollar cost strategy.
