The cryptocurrency market is in turmoil. It seems that the sector’s much-needed recovery is now underway and not only BTC, the absolute king of cryptocurrencies, but most of the altcoins in circulation seem to be in the grip of a bullish frenzy.
Today Ethereum is on the doorstep of $2,000, establishing itself above $1,910 at the moment.
Solana has also bounced back in a big way from the bearish cycle that had made it a protagonist in the last few days. $SOL has in fact recovered +5.95% in the last 7 days, having even touched $20!
But the absolute protagonist seems to be Bitcoin Cash. The crypto’s sensational performance manages to eclipse all others, pushing up over +70%.
Will it last? Let’s try to understand the different scenarios on the horizon.
Table of Contents
What is Bitcoin Cash?
It is a digital cryptocurrency created as a result of a hard fork from the original BTC blockchain on 1 August 2017. It was developed with the aim of addressing some perceived limitations of Bitcoin, particularly in terms of scalability and transaction fees.
Bitcoin Cash shares a common history with ‘its father’ up to the date of the fork. But diverges in terms of blockchain and some key features. One of the main differences between the two is the block size limit.
Our protagonist increased the block size from 1 MB to 8 MB (later increased further to 32 MB), allowing more transactions to be processed in each block. This change intended to improve transaction throughput and reduce fees.
Bitcoin Cash also implemented a different difficulty adjustment algorithm, known as Emergency Difficulty Adjustment (EDA). Which allows the network to adjust the difficulty of mining faster than Bitcoin. This adjustment mechanism ensure a more consistent block time and to quickly adapt to changes in the network’s hash rate.
How does Bitcoin Cash work?
In terms of functionality, this crypto aims to be a peer-to-peer electronic cash system, emphasising its use as a medium of exchange rather than solely as a store of value.
The team aims to make it more suitable for everyday transactions. Both operate on a decentralised network using blockchain technology, ensuring transparency and security. It allows users to send and receive funds directly, without the need for intermediaries such as banks.
It is important to note that we are talking about a cryptocurrency separate from BTC, even though it shares a similar name and history. Although they have similarities, they are separate entities with their own communities, development teams and market values.
We are currently in a dubious situation. On the monthly chart we can observe almost negligible movements of BCH in 2023. But we can see that the balance has been broken by a very strong bullish pressure.
Bitcoin Cash has managed to achieve a performance of +161.2% in the last month alone and 76.9% in the last 7 days.
Now, at the price of $286.20, we find ourselves close to a strong resistance area extending from $259.6 to $290.7.
This is an important moment as the price has taken a predictable breather, with the bulls definitely selling off once the $300 mark has been breached recently.
Now, however, all eyes are on the area just above $259.6, which could cause the price to bounce skyward, or cause it to fall back to pre-last month values.
BCH bullish: why?
Some traders have noticed some correlations between South Korean trading and the rising price of Bitcoin Cash.
Upbit, South Korea’s largest cryptocurrency exchange, has seen huge trading volumes on the BCH/KRW pair. Over the past few days, more than $350 million in volume accounted for nearly a quarter of the total volume on BCH.
The data shows a 24-hour trading volume for BCH of $545 million, about 27% of the total volume on the exchange. Moreover, it appears to be the most traded asset on Upbit at the time of writing.
South Korean exchange Bithumb is also seeing large volumes of Bitcoin Cash in local currency trading. The pair had a volume of $33 million in 24 hours and is second only to BTC/KRW on Bithumb.
As a result, Bitcoin Cash prices have risen enormously over the past few days! This allowed BCH to exceed $300 for the first time since April 2022, reaching a high of $329.
Surely, however, the latest news about Blackrock’s crypto ETF has also benefited BTC’s fork.
Bitcoin Cash future forecast
We cannot fail to notice the correlations between BTC and BCH. The two cryptocurrencies have often been influenced, especially Bitcoin Cash.
Of course, getting above $1,650 reached in 2021 seems arduous in 2023. But let us remember that BTC is also having a very interesting performance, now stable above $30,000.
If the king of cryptos recovers its absolute highs it is likely that Bitcoin Cash will follow, but for that we will have to wait a while. And it is not certain that we will see it by the end of 2023.