Bitcoin Cash (BCH), the native cryptocurrency of the peer-to-peer electronic cash system, has seen a steady decline in value over recent weeks. As of this writing, BCH is trading at $370.21, down 5% over the past seven days. Despite this downward momentum, key on-chain metrics suggest that BCH may now be undervalued—potentially presenting a strategic buying opportunity for contrarian investors.
Understanding MVRV: A Key Indicator of Market Value
One of the most telling signs of undervaluation comes from the Market Value to Realized Value (MVRV) ratio. This metric compares an asset’s current market price with the average acquisition cost of all coins in circulation.
When the MVRV ratio exceeds 1, it typically indicates that the asset is overvalued—meaning most holders are sitting on unrealized profits. Conversely, when the MVRV dips below 1—and especially into negative territory—it signals that the market value is lower than the average cost basis, suggesting widespread unrealized losses and potential undervaluation.
For BCH, the data is compelling:
- The 30-day moving average MVRV stands at -3.07%
- The 365-day moving average MVRV is even lower at -11.15%
These negative readings indicate that BCH is currently trading below its historical cost basis across both short- and long-term horizons. In traditional market logic, such conditions often precede recovery phases, as assets tend to revert toward their intrinsic value over time.
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Bearish Sentiment in Derivatives Market
Despite bullish signals from on-chain fundamentals, sentiment in the derivatives market remains cautious.
According to Coinglass data, BCH's funding rate has been consistently negative since early July, currently sitting at -0.02%. A negative funding rate means that traders holding short positions are paying those with longs—indicating stronger demand for bearish bets.
This reflects persistent pessimism among futures traders, who appear to lack confidence in a near-term price rebound. However, such widespread bearish positioning can sometimes act as a contrarian indicator: when too many traders are positioned on one side, any positive catalyst could trigger a sharp squeeze and rapid price reversal.
Technical Outlook: Will BCH Rebound or Fall Further?
From a technical perspective, recent price action has turned bearish.
On Tuesday, BCH closed below its 20-day Exponential Moving Average (EMA)—a significant threshold watched by traders. The 20-day EMA represents the average price over the last 20 trading sessions and serves as a dynamic support level.
A breakdown below this level suggests weakening buying pressure and increasing selling volume. If this trend holds, BCH could face further downside pressure, potentially testing its six-month low near $286.
However, markets are rarely linear. Should demand surge due to macroeconomic shifts, exchange inflows reverse, or broader crypto sentiment improve, BCH might stage a recovery toward resistance at $388.
Why Bitcoin Cash Stands Out in 2025
While often overshadowed by Bitcoin (BTC), Bitcoin Cash offers several distinct advantages that appeal to users and investors alike:
- Lower transaction fees: BCH consistently maintains cheaper fees than BTC, making it more viable for everyday transactions.
- Proven network security: With robust hash rate support and battle-tested infrastructure, BCH remains resilient against attacks.
- Growing adoption: The number of active BCH holding addresses has reached 22 million, reflecting sustained user interest and network growth.
Additionally, both BCH and BTC are set to undergo their next halving event in April 2025, which historically precedes major price movements. With supply growth cut in half, reduced issuance could drive upward pressure on price—especially if demand remains steady or increases.
👉 Learn how halving events shape cryptocurrency market cycles.
Ideal for Retail Investors Seeking Value
As Bitcoin approaches all-time highs—surpassing $70,000—many retail investors find entry increasingly difficult due to high per-unit cost. In contrast, BCH offers a more accessible alternative.
With a significantly lower price point and substantial room for growth from current levels—especially compared to its all-time high—BCH presents a compelling value proposition for budget-conscious investors.
Its combination of solid fundamentals, low valuation metrics, and favorable risk-reward ratio makes it an attractive option within the mid-cap cryptocurrency segment.
Frequently Asked Questions (FAQ)
Q: What does a negative MVRV ratio mean for BCH?
A: A negative MVRV ratio means that BCH is trading below the average cost at which coins were acquired. This often signals undervaluation and may indicate a favorable time to buy, especially if network fundamentals remain strong.
Q: Is a low funding rate always bearish for BCH?
A: Not necessarily. While a negative funding rate reflects short-term bearish sentiment, extreme readings can foreshadow short squeezes. If positive news emerges, traders may rush to cover their shorts, causing a sudden price spike.
Q: How does the upcoming halving affect BCH’s price outlook?
A: Halvings reduce block rewards by 50%, decreasing new supply. Historically, such events have preceded bull runs in various cryptocurrencies. With reduced selling pressure from miners post-halving, demand could outpace supply—potentially driving prices higher.
Q: Why choose BCH over other altcoins?
A: BCH combines proven scalability, low fees, strong security, and active development. Unlike many speculative tokens, it functions as digital cash with real-world use cases—making it a practical store and transfer of value.
Q: Can BCH break above $388 in the near term?
A: Yes, but it depends on market conditions. A resurgence in buying volume, positive on-chain activity, or broader market recovery could push BCH toward $388. Conversely, continued selling pressure may lead to retests near $286.
Q: Is now a good time to invest in BCH?
A: Based on current on-chain data—including MVRV and holder behavior—the asset appears undervalued. While short-term volatility is likely, long-term investors may view this period as an accumulation phase ahead of potential catalysts like the halving.
Final Thoughts: Accumulation Zone Ahead of Catalysts?
Bitcoin Cash may be flying under the radar, but its fundamentals tell a story of resilience and opportunity. With key on-chain metrics pointing to undervaluation, declining sentiment creating contrarian signals, and major network events on the horizon, BCH could be entering a strategic accumulation zone.
For investors looking beyond headlines and hype, now might be the time to assess whether BCH fits into a diversified digital asset portfolio.
👉 Start analyzing real-time data to spot undervalued assets before the crowd.
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