Bitcoin’s second largest fork rejects $ 270 again, wiping out some of the gains made in earlier times. At the moment, the daily trend of Bitcoin Cash is still bullish, but is not yet showing much strength. Keep reading this analysis to find out what’s going on with this cryptocurrency, so know what it can do in the coming days.
On the day the Bitcoin cash was halved, $ 270 was also declined
On April 8, BCH saw its first halving, the protocol to halve both mining premiums and the rate at which new coins were issued.
On the one hand, the reduction in speed when creating new units leads to a drastic shortage. This is the case if demand is maintained or increases, which would have a positive effect on the price of the cryptocurrency.
However, the other purpose of halving can be negative for the project itself as well as short term for the price.
Since mining rewards are paid in the network cryptocurrency you work in, halving those profits can result in losses if the price of the coin is insufficient to at least cover production costs.
And that’s exactly what happened at Bitcoin Cash. Even the largest had to go offline and had a much lower price than the cost of production.
This resulted in a reduction in the computing power of the network by more than 80% within a few hours and consequently a drop in prices. Caused by both miners who sell to cover losses and investors who lose confidence in the project due to the drastic decline in network security.
Bitcoin Cash is correlated with its parent
The price reaction after halving was short-term negative, leading to a drop of slightly more than 20% in 6 days.
As a result, when Bitcoin started making profits, BCH did the same. However, the underlying problem has still not improved, the hash rate has not yet recovered, and it is still not showing what indicates that mining interest has not yet returned.
During the recovery, the USD 270 was again a relevant obstacle, and the bears returned to take control.
Today, as BTC reaches 9,500, BCH continues to decline, trying to maintain the gains it has had a hard time making in the past few days.
Despite the fact that the correlation between these two cryptocurrencies is very high, BCH has still not been able to take advantage of the very positive expectations that exist on the market today.
If we look at the daily Bitcoin cash price chart, we can quickly see the relevance of the resistance at USD 270.
Hours before the crypto market collapsed in March, BCH struggled to maintain support and tried to get back over $ 270.
Then when the entire market recovered, this cryptocurrency encountered this resistance again. She was rejected again a few hours after halving.
Currently, the fall in prices was also the result of the bulls’ weakness in overcoming this resistance immediately. This was the first sign of a double-top trend reversal, which will not be confirmed until the cut is broken at $ 214.
At the moment, buyers are still trying to maintain their profits by respecting the 8-day EMA and the 18-day SMA, which in turn support the bullish structure that remains this season.
While this note is being written, the $ 242 support is respected to maintain the daily upward trend.
If this level breaks, it will make room for sales of at least up to $ 214, a price the bulls have to defend if they don’t want major blood loss as there will be no relevant support up to the $ 145 minimum zone.
For the bulls, thanks to a structure that is still respected and an overall positive mood on the crypto market, the bulls have the lion’s share of the chances of winning in their favor. If they manage to break the resistance at $ 270, the next target is $ 350. Higher is $ 400 the next level of care.
What do you think? Can Bitcoin Cash exceed $ 270 if the ecosystem’s positive expectations are used? Let us know what you think in the comments.
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