Bitcoin Cash Tops $600 for the First Time in Two Months as Hard Fork Momentum Builds
Bitcoin cash extended its relentless surge on Tuesday, with prices topping $600 a coin for the first time in over two months. BCH continues to benefit from fresh capital flows ahead of a highly-anticipated hard fork later this month.
The value of BCH maxed out at $620 on Tuesday, according to Bitfinex trading data. The fourth-largest cryptocurrency by market cap is currently trading at $610, having gained 8.1% compared with Monday. The daily chart shows extreme overbought conditions for BCH. While this would normally signify the potential for a broad pullback, the digital currency remains supported by strong fundamental drivers that could support a further uptrend in price action.
Bitcoin cash has returned to bull market territory based on the traditional sense of the term. The digital currency has added more than 45% over the past week. Typically, a bull market is described as a rally of 20% or more from a recent low. Over the same span, the broader cryptocurrency market has added $13 billion in value, with more than half-a-dozen top coins reporting double-digit returns.
Trading in BCH topped $900 million on Tuesday, according to CoinMarketCap. That’s more than three times higher than week ago levels but well below the recent peak of $1.4 billion. Market-wide volumes across all cryptocurrencies broke above $15 billion on Tuesday for the first time in three weeks.
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Investors are piling into bitcoin cash in a hurry to capitalize on the protocol’s upcoming hard fork, slated for Nov. 15, which will reward holders with a 1:1 payout of the newly created coin. Coinbase and Binance, two of the world’s largest digital currency exchanges, have already announced plans to support the upcoming fork. Both exchanges have told users they will suspend trading in BCH roughly 1-2 hours before the anticipated fork. Binance processed 7% of BCH’s daily trade volume on Tuesday. Coinbase Pro saw nearly 2% of the daily turnover.
Much like the hard fork that initially divided the bitcoin community, backers of BCH are faced with a similar conundrum: whether to support an increase in the protocol’s block size. A lack of consensus means the scheduled upgrade will likely result in a split that creates two separate BCH coins.
Bitcoin cash undergoes scheduled protocol upgrades twice each year. The pending hard fork aims to provide easier transactions while minimizing disruptions.
Investors can expect the BCH buying frenzy to continue until next week, though recent evidence suggests speculators are selling on highs. Although some analysts have speculated about market manipulation being the cause of the latest upsurge, the surge in trade volumes suggests there is legitimate interest in BCH at the present.
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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