Bitcoin Cash (BCH) Corrects Lower After Record-Setting Weekend
The Bitcoin Cash (BCH) offshoot soared to new records over the weekend, as higher trade volume and a boost in mining profitability drove gains. However, prices have since come crashing down amid a broad pullback in the newly forged cryptocurrency.
BCH Approached $1,000 Over the Weekend
Bitcoin Cash jumped 44% to $996.92 on Saturday, according to CoinMarketCap. That was the highest the cryptocurrency had ever traded in its roughly three-week history, but still less than a quarter of the original Bitcoin’s value. The BCH was last down 8% against the U.S. dollar to trade at $741.00.
At its current price, the BCH is hovering just below a major trend line. The Relative Strength Index (RSI) is in the low 40s, which implies weak underlying momentum. Long-term, the major support level is located around $640.00. Prices are approaching a major resistance level near $760.00.
The sharp rise in Bitcoin Cash over the weekend triggered a sizable drop in Bitcoin. After registering two all-time highs last week, the world’s leading cryptocurrency slumped back toward $4,000 on Sunday. Prices have since returned above $4,100.00.
Despite its latest correction, Bitcoin Cash is now the world’s No. 3 cryptocurrency based on total assets. Its market cap of $12.2 billion puts it well below Bitcoin ($67.4 billion) and Ethereum ($28 billion). There are now ten cryptocurrencies valued at $1 billion or more.
Mining Profitability Rises
Bitcoin Cash’s built-in protocols have gradually made it easier to mine the cryptocurrency, thus boosting its profitability. Bitcoin Cash is now 69% more profitable to mine than its predecessor, according to a recent analysis from Coin Dance.
The BCH has also benefited from a recent upsurge in trading volume, with the South Korean won driving much of the gains. At its peak, the won contributed to almost half of BCH trade volume.
South Korea has been at the centre of the cryptocurrency euphoria. Hacked.com reported last week that the Asian country triggered a sharp uptrend in Ethereum prices, with the won accounting for over 60% of the purchases.
The country could become the next haven for cryptocurrencies after policymakers announced tentative plans to regulate the market. Japan spearheaded regulation on the Asian continent earlier this year, triggering a sharp rise in cryptocurrencies.