While crypto traders have been talking about BlackRock’s Bitcoin ETF and XRP’s battle with the U.S Securities and Exchange Commission, Bitcoin Cash (BCH) has been quietly on the move. For weeks, the original Bitcoin remained stuck in a $30K–$31K range, with altcoins mirroring the stagnation showing no optimism for the sector in general.
But then, on June 20, BCH started an impressive 182% rise from $104 to today’s $294. What’s so different about BCH compared to other coins? And will the bull run continue?
What is Bitcoin Cash?
Bitcoin Cash was created back in August 2017, the result of a hard fork from the original Bitcoin blockchain. Its creators launched the new blockchain to address the limitations of Bitcoin, such as scalability and transaction speed. Bitcoin Cash aims to be a global form of money, offering quick transactions, low fees, better privacy, and larger block sizes. Developers of BCH made changes to the BTC code and released their own software, resulting in the split of the original Bitcoin blockchain into two separate chains: Bitcoin and Bitcoin Cash.
This split occurred due to disagreements within the community regarding the scaling of Bitcoin and the introduction of the SegWit upgrade. The scaling debate revolved around two factions. The supporters of small blocks, who opposed increasing the block size due to concerns about centralization and security vulnerabilities that could arise from hosting full nodes. Then there were the supporters of large blocks, who advocated for a faster solution and were worried about rising transaction fees impeding growth.
Among tech fans, BCH is widely considered to be vastly superior to Bitcoin in terms of performance, but it’s never had center stage. That might all be about to change.
Is it too late to go bullish on BCH?
The strong rally over the past week has some crypto investors concerned that they might have missed their chance to buy BCH on the cheap. The trigger for Bitcoin Cash’s rally last week was its listing on a much-hyped cryptocurrency exchange called EDX Markets, which has the backing of major financial institutions like the venture capital firm Sequoia Capital, Citadel, and even Fidelity. BCH is still a long way from previous all-time highs, and it’s certainly possible that current sentiment could boost BCH prices in the short term. But how high might it go?
Back in May 2021, Bitcoin Cash rose as high as $1600 - five times higher than today, but still pocket change compared to 2017’s high of $4,300. There’s plenty of room for BCH to grow, and all it takes is some hype, so being prepared for another spike makes sense.
Conclusion
Crypto hypes are something to be wary of. Whenever a coin has good reason for traders to be bullish, the price goes up, but we haven’t seen prolonged rallies since 2016. Traders and investors who bought into the Bitcoin hype seven years ago got burned by the rapid fallout of 2017, while many seem happy enough to profit from the short lived spikes that are here today, gone tomorrow.
There’s not one credible reason to believe BCH will continue to rise. And since traders are much more apprehensive about buying a coin that has already spiked, caution is advised. There may still be some bullish momentum, but sooner or later, those who created the hype will want to cash out.
At the time of writing, trader sentiment showed that 66% of traders were still buying at the 2023 high, so more bullish price action may be possible. The stochastic RSI showed an overbought signal that’s now flattening, so we might be looking at a new price range that will linger for a while. Follow the crypto news closely and keep your eye on the sentiment bar by installing the Exness trade app. As always with crypto, be ready to react without delay to maximize your potential.
