Bitcoin Cash (BCH) has seen fluctuations in price amid shifting investor interest towards Litecoin (LTC) due to impending ETF approvals. Whale demand for BCH is declining, impacting market liquidity and creating potential risks for future price movements. Technical indicators suggest a bearish outlook unless BCH can reclaim critical resistance levels.

Bitcoin Cash (BCH) has recently seen a price increase, climbing by 6% before experiencing a correction to $318. On-chain data indicates that major investors are potentially shifting their assets from BCH to Litecoin (LTC), prompted by rising excitement surrounding ETF approvals. Litecoin is benefiting from stronger investor interest, as evidenced by a 35% increase in its average transaction size since February 3, contrasting BCH’s 67% decline during the same period.

The altcoin market has generally rebounded thanks to positive developments, particularly announcements from the U.S. Securities and Exchange Commission (SEC) regarding ETF filings for Litecoin and Ripple (XRP). The confirmation of these filings has led investors to anticipate a 90% likelihood of Litecoin’s ETF approval, thus increasing demand for other cryptocurrencies, including Bitcoin Cash. However, despite an initial rally, BCH’s price faces challenges in maintaining upward momentum due to waning whale interest.

Analysis of transaction sizes reveals a concerning trend for BCH. The Average Transaction Size metric indicates that large investors are reducing their positions, implying that BCH may encounter further declines. The significant drop suggests an emerging bearish outlook for BCH as demand shifts towards assets (like LTC) with forthcoming ETF approvals, leading to reduced liquidity for BCH in the market.

From a technical analysis perspective, Bitcoin Cash’s price is displaying signs of volatility, potentially culminating in a double death cross as the 50-day Simple Moving Average nears crossing below the 200-day SMA. This scenario could signify a sustained bearish environment, especially following a bearish signal triggered previously when the 50-day SMA slipped below the 100-day SMA. A breach of the $300 psychological barrier may lead to increased selling pressure.

In conclusion, Bitcoin Cash is presently at risk due to declining whale demand and shifting market interests toward Litecoin and other altcoins with prospective ETF gains. A decisive move back above the $320-$330 range is crucial for reversing the current bearish momentum. Conversely, without new favorable developments, Bitcoin Cash’s price could continue to struggle and potentially retrace to February’s lows.

In summary, Bitcoin Cash faces significant challenges as investor focus shifts towards Litecoin amid ETF excitement. The declining whale demand and negative technical indicators indicate further downside risks for BCH. A sustained breakout above key resistance levels is necessary to avert a bear market, while a failure to do so may result in further losses for BCH.

Original Source: www.fxstreet.com

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