While Bitcoin Cash saw a renewed interest from investors leading to a surge in price late last month, things seem to have cooled down at the moment. Recent data shows Bitcoin Cash miners have been withdrawing funds at a rapid pace, which could signal a decline in the value of the altcoin.
Miners Withdrawing From BCH Reserves Spell Bearish Trend
It was reported last month that trading activity of the altcoin surged on various crypto exchanges, leading to a surge of over 200% in price. As a consequence of this, miners flocked to the blockchain in an effort to capitalize on the price increase.
However, the price of Bitcoin Cash has fallen by 28% since then, and the miner euphoria has been plateauing. According to recent data from IntoTheBlock, miners have been withdrawing BCH from mining pool reserves for the past month.
During the height of the BCH surge, miners held a reserve balance of around 7.73 million. Now, the figure has dropped close to 6.5 million. At the current price of BCH, this selloff totals more than $260 million.
Miners are one of the backbones of the Bitcoin Cash network and selloffs by miners often put downward pressure on the price. The sell-offs also signal a bearish trend as it shows that miners expect the value of BCH to decrease further, so they’re selling now to lock in profits from the bull run in late June.
BCH price sitting at $243 | Source: BCHUSD on Tradingview.com
BCH Hash Rate Drops
In a similar vein, the hashrate of Bitcoin Cash has declined recently as miners have started withdrawing their funds. Despite this, mining activity is still at a greater level than it was before June.
According to data from Coinwarz, Bitcoin Cash’s hashrate – the total mining power dedicated to validating BCH transactions, has decreased by more than 50% since reaching its yearly high of 6.27 EH/s on June 30. Currently, the hashrate stands at just 3.11 EH/s.
This huge drop in mining power proves that a noticeable number of BCH miners have stopped mining the cryptocurrency and have withdrawn their funds. In the process, the miner share of the total market cap of BCH has dropped from 40% to 34%.
The recent price drop and miner withdrawals suggest a bearish trend, but things haven’t really subsided for BCH yet as the cryptocurrency still shows strong support from investors it recently amassed.
At the time of writing, BCH is trading at $243.65. Trading volume still remains strong and is up by 73.31% in the past 24 hours.
Featured image from Capital.com, chart from Tradingview.com