Is the market big enough for two forked bitcoin currencies?
Early indications suggest so, as bitcoin cash is alternating gains with losses by trading in a tight range so far on Wednesday. At press time, the bitcoin cash-US dollar (BCH/USD) exchange rate is $328. As per CoinMarketCap, the cryptocurrency has lost just 2 percent in the last 24 hours.
Still, the lack of price movement may be encouraging for supporters.
BCH has stubbornly defended the $300 mark even amid the noise surrounding this week’s bitcoin hard fork and the creation of another rival project – bitcoin gold – that adopted a same go-to-market strategy. For more than two weeks, dips below $300 have been quickly undone, still, a more sustainable break above $350 levels remains elusive.
More broadly, the cryptocurrency did rally above $400 on Oct. 17, largely on the back of a surge in Korean trading volumes. However, the spike was short-lived as prices fell back to $300 in the subsequent days.
It seems BCH is waiting for a stronger catalyst, and it could find some love if the conflict over bitcoin ahead of the Nov. 16 SegWit2x hard fork forces investors to switch out of BTC or diversify their holdings.
But while BCH waits for a stronger catalyst, the price action analysis anticipates better days ahead for the cryptocurrency.
BCH/USD daily chart
- Though repeated rebound from sub-$300 levels is encouraging, the outlook still remains neutral.
- Only a break above the descending trend line would add credence to the bullish money flow index (MFI) and open up upside towards $484.90 (Sep. 28 high).
- On the downside, an end-of-the-day close below $300 could yield a sell-off to $260-250 levels.
BCH/BTC daily chart
- The bullish price RSI divergence suggests the BCH/BTC exchange rate is likely to tick higher to 0.09 (falling trend line resistance).
- On the downside, an end-of-the-day close below BTC 0.05 would open doors for a slide to BTC 0.01 levels.
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