The distribution of Bitcoin Cash (BCH) coins to Mt. Gox users means a growing community that currently consists of more than 22.2 million on-chain holders.
Bitcoin Cash (BCH), the largest Bitcoin-inspired hard fork project focused on peer-to-peer payments, dropped more than 35 percent in the past four weeks to hover around $308 on Friday, during the early New York session.
The notable BCH price decline in the recent past was significantly attributed to the Mt. Gox distribution of funds to its creditors, which began today.
Bitcoin Cash Price Performance
The mid-cap altcoin, with a fully diluted valuation of about $6.4 billion and a daily average traded volume of around $410 million, has consistently closed below the 200-day Moving Average (MA), signaling further bearish sentiment. Similarly, BCH price on the weekly time frame dropped below a crucial support level of around $327, thus signaling further weakness ahead.
If the BCH price against the US dollar consistently closes below the 50 and 2000 MAs, leading to a death cross, the altcoin could further bleed below $200. Moreover, the Mt. Gox distribution of BCH coins will weigh heavily on the recent bullish sentiment.
Additionally, BCH’s price significantly underperformed in 2021’s crypto bull market, whereby it did not rally beyond its all-time high (ATH). As a result, some crypto analysts have regarded BCH as a sleeping giant while others have referred to it as a zombie altcoin.
From a technical standpoint, BCH price will likely find a solid support level of around $221 in the coming weeks, if the altcoin fails to defend the crucial support level of around $327. Furthermore, the $221 support level for the BCH price coincides with the 0.786 weekly Fibonacci Retracement.
Ecosystem Check
The Bitcoin Cash ecosystem has thrived in the past few years due to the support of the legendary proof-of-work (PoW) consensus mechanism. The Bitcoin Cash ecosystem attracted more miners after the Ethereum (ETH) network successfully transitioned from the PoW to the current proof-of-stake consensus mechanism.
The Bitcoin Cash ecosystem has, however, been criticized for not evolving through the web3 ecosystem, by supporting smart contracts. As a result, the BCH ecosystem has been outshined by newer blockchains such as Solana (SOL), Toncoin (TON), and BSC.
Silver Lining
The distribution of the BCH coins by Mt. Gox in the next three months is a huge welcome for the general community growth. Moreover, the BCH holders will grow exponentially in the coming months, more so now that the crypto market is already in a macro bull cycle.
As a result, BCH price will soon rebound to a new all-time high, fueled by heightened adoption by both institutional investors and retail traders. The fact that BCH has deep liquidity on various decentralized applications will significantly bolster mass adoption in the subsequent years.
Currently, there are more than 22 million BCH holders with non-zero balances.
