On April 3rd, 2024, the Bitcoin Cash network deployed the second halving event on the blockchain since its inception in 2017. This much-anticipated within the community came at a time when the market was becoming increasingly skeptical about the overall performance of the cryptocurrency.
Bitcoin Cash was forked from the Bitcoin network by ‘Bitcoin Jesus’ a name given to Roger Ver, for his open campaign for Bitcoin. BCH was born after differences arose from technical disagreements concerning the most effective way to boost Bitcoin’s transaction limits. Ever since, the token has taken its path, undergoing two halving events, with the recent one just a few days ago.
The market has witnessed an overall decline in open interest in BCH – a cryptocurrency that was hard-forked directly from Bitcoin. Crypto traders are often keen on halving events, and usually, these events are characterized by an immediate price rise of the underlying traded token. However, this hasn’t been the case for Bitcoin Cash this season, as it recorded a price slide after its halving event on April 3rd. So, what exactly motivated this strange market behavior on BCH price? Let’s look at some analysis.
Open Interest and Price Performance
Bitcoin Cash’s open interest has declined by a considerable margin since the halving event. According to Coinglass data, the Bitcoin Cash derivative’s open interest has decreased by 9.42% today. The dollar value locked in active perpetual futures with BCH as the underlying asset has dramatically declined after halving, going against typical post-halving expectations.
Coinmarketcap data also shows a similar downtrend in BCH price. Today, Bitcoin Cash is trading at 473 USD with a 24-hour trading volume of $881,570,126 USD. Based on these figures, the price of Bitcoin Cash is down 11.75% in 24 hours.
Market Dynamics Post-Halving
The markets have exhibited unprecedented behavior as BCH recorded a significant price slide on April 10th. The digital asset price decreased by 7.51% in 3 hours. The dramatic mass sell-off attitude is a shocker, considering the token is viewed as a close Bitcoin proxy with near similar market behavior.
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Market data shows that the OI – short for Open Interest- has steadily decreased since the halving. Considering BCH’s earlier upward momentum before the halving event, it is clear traders only focused on the BCH market dynamics because of the hype around the halving event.
Comparison with the market reaction to the first-ever halving in 2020
Halving events have always been quite predictable since both advanced and novice traders seem to be in agreement that prices will rise post-having. It is not a difficult concept to grasp since halving essentially reduces the block rewards by half.
BCH halving back in 2020 followed the typical digital currency trend by registering a 4.7% price rise and an OI rise of 10% to $73.86 million, which was quite impressive for a three-year-old token.
The two halving events clearly impacted BCH prices differently. The first halving event resulted in a sudden price rise while this years halving saw a significant price decline post halving.
Bitcoin Cash’s Position in the Crypto Market
Bitcoin Cash has really struggled with identity as most crypto users have always viewed it as a cheaper Bitcoin with lower transaction costs and reduced energy requirements. Ideally, this isn’t far from the truth; however, it appears that Bitcoin, being the pioneer, stole all its thunder!
Inherently, Bitcoin Cash is a superb cryptocurrency with a strong network and several potential use cases. Considering the significantly low transaction costs on the network, it can easily be used as currency – which closely aligns with Satoshi Nakamoto’s vision for Bitcoin. Similarly, it shares a lot of similarities with Bitcoin, allowing it to be a good candidate for a speculative digital asset that provides a store of value.
Seemingly, Bitcoin Cash has lost momentum within the crypto space and is steadily falling behind in the rankings, according to Coinmarketcap rankings. This trend triggered Blockstream CEO Adam Back to urge Roger Ver to accept and rejoin the Bitcoin community.
Roger Ver’s advocacy for Bitcoin Cash
Roger Ver’s advocacy for Bitcoin Cash stems deep. Given that he’s an early adopter of Bitcoin, it’s clear that he understood the benefits of blockchain technology and the potential shortcomings of the Bitcoin network as a whole.
The need to create a more efficient version of Bitcoin came about when he realized Bitcoin’s hefty transaction fees and inability to serve as currency as it was intended by Satoshi. Ideally, these arguments hold a lot of truth, but in reality, Bitcoin has grown massively over the years, and the market seems to have accepted its inability to act as a currency and subsequently embraced its status as a speculative digital asset.
The future of Bitcoin Cash in the broader crypto market
The cryptocurrency market is constantly evolving. Currently, over 2.5 million crypto tokens exist, serving different purposes, from actual real-world use cases to mere meme coins. Bitcoin Cash is one of the few cryptocurrencies to experience a negative post-halving impact, indicating a significant shift in attention akin to Litecoin.
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Price prediction analytics on various websites, including Binance, suggest that BCH will record steady price increases over the years. The expected growth rates, however, are significantly low, nullifying the risks involved when investing in cryptocurrencies. Additionally, the current trend shows that we expect different use cases for blockchain technology within different sectors. Bitcoin Cash may not be able to dethrone Bitcoin, but it will certainly be around for as long as Bitcoin and other cryptocurrencies exist.
FAQs
Is there any future for Bitcoin Cash?
Yes, the future of Bitcoin Cash is secured. The network offers lower transaction costs and faster settlement times than the Bitcoin network. Despite the current dip, the token has withstood the test of time overall and is expected to record steady price gains in the future.
Is Bitcoin Cash good to buy?
BCH currently serves nearly the same purpose as Bitcoin – a speculative digital asset that offers a store of value. Many price prediction analyses show BCH prices will rise, making it a good buy for long-term HODLers.
Will Bitcoin Cash reach $3,000 again?
Yes and No. Considering the existing forecast data, Bitcoin Cash price will record minimal price gains. Considering its current price, it will take a long time to reach $3000.
Does Bitcoin Cash still exist?
Yes, Bitcoin Cash exits and is currently tradable on all major cryptocurrency exchange platforms in the market. The coin currently trades at 473 USD and has a Market Cap of 9,240,853,134 USD and ranks at #14 on Coinmarketcap.
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