Technical Analysis
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As of summer 2023, Bitcoin Cash is among the “growth leaders” in price performance among cryptocurrencies. If at the beginning of June the rate of BTH was around $112, then a month later, on July 9, the altcoin is trading around $269.. At the same time, the maximum rate in the course of trading exceeded $329 at the moment on June 30, according to the Coinbase cryptocurrency exchange.
Source: tradingview.com
The situation suggests more of a correction. It is understandable: from June 20 to June 30 the coin increased by more than 200%.. So a certain rollback was predicted. In general, the trend may continue in the near future. This is hinted at by the negative value of the
The negative value of the funding rate, both current and forecasted, hints at this;
Source: coinalyze.net
And anyway, the Bitcoin Cash network is not popular in 2023. For example, the size of transactions expressed in dollars, although close to the annual peak values, but very far from the absolute maximums. The disappointing trend has been going on for a year and a half now.
Source: bitinfocharts.com
However there are also those who believe Bitcoin Cash is not over yet. The popular crypto trader Kaleo left this
a message to those who care and sympathize:
“I have a good feeling that BCH is far from over.”
The coin is still far from its historical highs (over $4,300 in December 2017), but given the rapid growth, an important resistance level could be a one-year high – value around $330, and a support level – around $250 in a wide range.
Source: tradingview.com
Nevertheless, the positive dynamics (growth of more than 150%) is probably due to among other fundamental factors. What could have been the catalyst?
BTC Fork
Back in 2017, as a possible solution to the scalability problem of the historically first cryptocurrency, a new cryptocurrency – Bitcoin Cash – emerged as a result of the branching of the main network (hardfork) of Bitcoin. Technically, except for the higher bandwidth, the coin largely duplicates its predecessor, BTC. Its pricing will be affected by separate identical factors, namely the upcoming 2024 halving, followed by a reduction in the block award, and overall limited issuance.
On the other hand, an important component of pricing is the cumulative amount of computing power involved in the mining process. When it comes to the Bitcoin network’s aggregate hash rate, it has grown at least 30 times since the beginning of 2018 (from about 14 Exaheesh/sec to more than 440 Exaheesh/sec). The BCH is characterized by more modest figures, namely the maximum values reached in 2017 and 2018: about 8 Exahesh/sec and the current maximum in June-July 2023 about 5 Exahesh/sec.
Increased demand
One possible catalyst for recent growth may have been the launch of the EDX Markets trading platform supporting Bitcoin Cash and a number of other popular coins.
Also since late June, users of Upbit
recorded an increased trading volume of the pair BCH/Korean Won (more than $550 million in 24 hours as of June 30), which indicates increased demand for the asset from the residents of the Republic of Korea.
And we can also compare the overall positive dynamics of the coin with its closest competitor – the cryptocurrency Litecoin. The latter has also significantly increased in price – about 60% since the beginning of the year.
Conceptually, both electronic monetary systems are similar. It is based on developments and solutions from the Bitcoin program code, but the bandwidth is increased. Both coins are on the threshold of halving (for LTC the nearest will come in August of this year). And both coins have an increased trading demand: with regard to LTC, the position has been considerably
large holders, the whales, have built up their position.
Regulatory pressure
Another factor in the increased demand for “classic cryptocurrency” similar to BTC can be considered the growing regulatory pressure from European and U.S. officials. In a recent SEC lawsuit against cryptocurrency exchanges, BTC did not appear as a security.
On the other hand, a number of other coins have been delisted, such as from Binance.US.
In short, cryptocurrencies like LTC and BCH may well have been more “understandable and predictable” in the eyes of individual investors in terms of administrative regulation. This gradually adjusted the focus in favor of altcoins like Bitcoin Cash.
This material and the information in it does not constitute individual or other investment advice. The opinions expressed herein are those of the author and do not necessarily reflect the views of analyst portals and experts.