As Bitcoin Prices Soar, Forked Rivals Face Different Paths
Bitcoin's stellar rally looks to have boosted its spin-offs bitcoin cash and bitcoin gold. But what lies ahead for the rival cryptocurrencies?
Nov 28, 2017 at 3:35 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/5SK5L6RTONHEDEWY6EXZLODXUA.jpg)
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Bitcoin's stellar rally close to the $10,000 mark appears to have boosted the prices of its recently forked spin-offs bitcoin cash (BCH) and bitcoin gold (BTG). But can they maintain that momentum?
Rival cryptocurrency bitcoin cash has something of a parasitic relationship with bitcoin, in that it not only benefits from the surge in interest in cryptocurrencies due to BTC's astonishing price rally, but it also does see gains in bouts of correction to bitcoin prices.
Bitcoin cash has gained 416 percent from Sept. lows near $300, while the parent cryptocurrency has gained 235 percent over the same period. However, on a year-to-date basis, bitcoin is up almost 900 percent. It remains to be seen if bitcoin cash can surpass that benchmark before its first anniversary on Aug. 1, 2018.
Bitcoin cash clocked a record high above $2,400 earlier this month. As of writing, it is changing hands at $1,600; down 3 percent in the last 24 hours, as per CoinMarketCap.
Meanwhile, bitcoin gold is less than a month old, but that didn't stop it from recently leaping confidently into the rankings as the fifth largest cryptocurrency. However, as we discussed yesterday, bitcoin gold is finding little love in the investor community which has cited a lack of use cases, and looks currently to be overvalued.
While prices have risen over the last week, BTG is now losing altitude as expected – nursing a 7 percent drop in the last 24 hours, and trading at $335 levels at press time.
The chart analysis points to better days ahead for bitcoin cash, but paints a less glowing picture for bitcoin gold.
Bitcoin cash chart
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The chart above shows:
- The relative strength index (RSI) has turned lower from the overbought territory (above 70.00), which indicates scope for a healthy pullback.
- Still, the outlook remains bullish – as suggested by the string of higher lows marked by trendlines and upward sloping 10-day MA.
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- A convincing break below the 10-day MA would confirm that a near-term top is in place above $1,750. In such a case, prices could test trendline support seen today at $1,250.
- On the higher side, a move above $1,750 would open doors for a re-test of $2,000.
Bitcoin gold 4-hour chart
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The cryptocurrency looks set to explore sub-$300 levels as discussed yesterday. The relative strength index (RSI) now favors the bears (dropped below 50.00). This could only accentuate bearish pressure around the cryptocurrency.
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