Bitcoin Cash (BCH) is Running Rampant; Still Time to Buy?
Bitcoin cash (BCH) has charted staggering growth in the last 36 hours and looks poised to flip Litecoin (LTC) for the no. 4 spot on the market-cap index. BCH is rising as part of a general market uptrend that began with bitcoin, but its gains signal months of pent-up demand for the alternative cryptocurrency.
BCH/USD Price Analysis
The bitcoin cash price extended its rally on Tuesday, peaking at $290 for the first time since November. At its highest point, BCH was up some 50% on the day, easily outpacing bitcoin and the rest of its large-cap peers. At the time of writing, BCH/USD was up more than 40% at $280, according to CoinMarketCap. It has gained more than 65% since the rally began on Tuesday.
At current values, bitcoin cash has a total market capitalization of nearly $5 billion, where it was just shy of Litecoin (LTC).
In addition to the general market melt up, bitcoin cash may be benefitting from positive fundamental forces tied to the network’s unspent transaction output (UTXO). The UTXO set size has reached the highest level since 2017, according to Bitcoin.com. Historically, a bigger UTXO size is a major bullish indicator.
As Hacked previously reported, crypto trade volumes have been on a staggering high since the year began, and activity on virtual exchange and futures markets may have served as a precursor to the latest rally. Crypto Facilities, a subsidiary of crypto exchange Kraken, recently announced that BCH futures contracts have been on the rise for the past few weeks.
In the last 24 hours, virtual exchanges processed more than $3 billion worth of BCH trades, according to CoinMarketCap. The largest virtual markets were LBank, Huobi, OEX and Binance.
Beyond bitcoin cash, crypto trade volumes as a whole have reached a staggering $79 billion. Tether (USDT), a dollar-backed stablecoin, saw the highest volume percentage-wise at more than 29% of the total. That’s equivalent to more than $22 billion. Bitcoin was second with more than $20 billion changing hands.
Still Time to Buy?
Despite surging through the stratosphere, bitcoin cash faces very little technical resistance above $240. By swiftly overtaking that level, BCH is now on track to zip past $300 and eventually onto $400. In the most optimistic scenario, the bulls may have enough justification to push back toward $600. Although this would require another doubling from current levels, crypto rallies have been known to pile up fairly quickly.
The sudden spike in crypto prices on Tuesday may have instilled the fear of missing out, or FOMO, among traders who have spent the better part of the year on the sidelines. If that’s the case, BCH and the market as a whole may still see bigger upside before the rally cools.
Even at current levels, bitcoin cash is still 93% off its record high. It has considerable runway for further gains should FOMO sweep the market as it looks to be doing currently.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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