BCH Network Activity Enters a Decline Amid Crypto Market Recovery
The Bitcoin Cash price has been struggling to break new ground while other major cryptocurrencies have been reaching new highs. On-chain data analysis reveals that a decline in network activity is one of the main factors behind the slowdown in BCH price action. The number of active users on the Bitcoin Cash peer-to-peer network has dropped by 79% in the past week, and the number of new users joining the network has decreased by 85%. These metrics indicate a bearish signal for BCH, suggesting that there may be less market demand for the coin in the coming days.
Fees Generated on the BCH Network Decline
Another metric confirming the decline in network activity is the total fees generated on the Bitcoin Cash network, which have decreased by 73% in the past week. This decline in transaction fees indicates a slowing network demand and suggests that the recent uptrend in BCH price may have been driven primarily by speculative trading rather than increased network activity. Without a significant increase in network demand, the bullish momentum of Bitcoin Cash could begin to fade in the near future.
BCH Price Prediction: $250 Resistance Could Prove Daunting
From an on-chain perspective, there are signs that BCH may experience a mild retracement despite positive market sentiment. The Global In/Out of the Money data shows that there is significant resistance around the $250 area, with 1.25 million addresses holding 2.09 million BCH at a minimum price of $248. If these addresses start closing out their positions, it could trigger a price correction. However, if BCH manages to surpass $300, it could negate this prediction. Nevertheless, there is still resistance at around $280 that could pose a challenge for further price growth.
Hot Take: Bitcoin Cash Struggles to Maintain Bullish Momentum
The Bitcoin Cash price has been facing several challenges in maintaining its bullish momentum. Declining network activity, as evidenced by a decrease in active addresses and new users, along with a decline in transaction fees, suggests that there may be less market demand for BCH. This could lead to a potential retracement in the price of Bitcoin Cash in the coming days. However, if BCH manages to overcome resistance levels and increase network demand, it may be able to sustain its upward trajectory. Overall, the future of Bitcoin Cash remains uncertain as it navigates these obstacles.
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