BCH/USD Technical Analysis
About Bitcoin Cash (BCH)
Bitcoin Cash (BCH) has enjoyed quite the bullish momentum since the beginning of 2021, with its price soring to a high of $1,635.15 in mid-May, just before the crypto market crash hit. As of June 2021, BCH ranks 11th on the basis of its market capitalization - which stands at almost $11.5 billion, on CoinMarketCap. Of the total supply of 21 million coins, more than 18.7 million coins have already been created and are in circulation.
As an investment, there remains some uncertainty on its future prospects, especially when you consider the number of active addresses that hold BCH. Despite the booming interest in cryptocurrencies among investors, the number of active addresses holding Bitcoin Cash has remained mostly steady and has shown a very slight increase through 2021 so far, indicating somewhat lukewarm adoption rates in comparison with other leading cryptocurrencies.
The waning interest in Bitcoin Cash was also a factor for it to get delisted from leading crypto exchange OKCoin in February 2021. The exchange maintained that its decision was taken in light of Craig Wright's threat to take legal action to enforce copyright claims on Bitcoin's whitepaper.
Bitcoin Cash Breakdown
Bitcoin Cash came about as the result of a hard fork in Bitcoin which took place in August 2017, and while it shares several similarities with the leading cryptocurrency, it offers lower costs and times on processing transactions. Like Bitcoin, the supply of BCH remains capped at 21 million which provides it stability in the long term. Following the hard fork, the block size of Bitcoin Cash was raised from 1MB to 8MB and went up to 32MB by November 2020. A higher block size gives the network a higher TPS and lower transaction fees than Bitcoin.
While Bitcoin's blocks can handle anywhere between 1,000 and 1,500 TPS, BCH's larger block size can handle up to 25,000 TPS, making it a faster way to transfer electronic payments in a decentralized manner with lower fees. Unlike Bitcoin that has seen its value soar as it turns into an asset class and is considered a store of value among investors, both institutional and retail, Bitcoin Cash maintains the original vision of the leading cryptocurrency - to be a payment system that can process transactions in a faster and cheaper manner.
Another key difference in BCH's technology is that unlike the BTC network, it does not use Segregated Witness (SegWit) to include more transactions in each block. It uses a POW consensus mechanism for mining new coins like BTC and originally used the same mining difficulty algorithm as BTC as well - that of Emergency Difficulty Adjustment (EDA). BCH later revised its EDA algorithm so it became easier to mine its tokens when compared to BTC.
Bitcoin Cash History
Bitcoin Cash was created on August 1, 2017 and originated from a hard fork of Bitcoin, which offered it the ability to increase its block size and handle faster and cheaper transactions than the original cryptocurrency. BCH experienced another hard fork in November 2018 when it split into two networks - Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision). Bitcoin Cash ABC is now referred to as Bitcoin Cash (BCH).
The Bitcoin Cash price soared to an ATH of $4,355.62 in December 2017 during the crypto bull run during the period. Following this, when the market crashed in 2018, the BCH rate tumbled all the way down to $75.03, although since then it has recovered considerably. The latest bull run in late 2020, early 2021 saw the Bitcoin Cash rise above $1,000 and cross $1,635. Although, the bubble burst in the crypto market crash of mid-May, causing the price to fall hard all the way down to $180.50. While the market has somewhat stabilized as of June 2021, the optimism seen in the beginning of the year is yet to return, keeping the BCH price well below the $1,000 level and around the $600 mark.
Bitcoin Cash Price Factors
Like most of the cryptocurrencies, there is considerable volatility in the Bitcoin Cash price and several factors tend to drive fluctuations in it. One of the biggest factors that affect it is issues with Bitcoin. As the leader in the crypto market gets bigger in value and popularity, it could face more problems with scalability, which in turn could increase the attractiveness of alternatives like BCH as a form of electronic payment transfer. If more users migrate away from Bitcoin in search of faster and cheaper alternatives for conducting digital transactions, the adoption rate could rise and drive the BCH rate higher.
On the other hand, Bitcoin also has a role to play in determining the mood of the overall crypto market which could also influence the Bitcoin Cash rate. When BTC falls, the sentiment among investors in the overall crypto market sours and sends most of the other digital assets lower, including BCH. On the other hand, positive news about increased acceptance of Bitcoin and cryptocurrencies in general can boost investor interest in Bitcoin cash and send its value higher. Since BCH has a limited supply, a surge in demand can have a significant impact on its price. If the demand rises sharply, its value can strengthen and vice versa.
A lack of regulation in the crypto space also drives considerable uncertainty and volatility in the BCH price.News of regulation by governments around the world amid soaring interest and adoption of digital currencies could potentially affect the value of Bitcoin Cash. In addition, any new entrants into the space that promise even faster transactions at cheaper costs could drive users away from it and cause the Bitcoin Cash rate to decline.
Trading Bitcoin Cash
In order to trade Bitcoin Cash (BCH), the first step is to find out which cryptocurrency exchanges or brokers offer this as an option. You can then compare the various features and select the exchange/broker that best suits your needs and register for an account there. The next step is to convert your trading capital from fiat into cryptocurrencies and use it to buy and then sell your BCH holdings based on careful analysis of technical and fundamental factors that dictate price trends.
Given the highly unpredictable and volatile nature of cryptocurrencies, we recommend that you perform due diligence by spending some time to gain an understanding of what moves the crypto market as well as track the latest developments in this space in general as well as related to Bitcoin Cash. Armed with this information, you will be able to place more confident trades and potentially minimize your risk exposure when placing trades.
BCH/USD - FAQs
Bitcoin Cash is a cryptocurrency designed to facilitate peer-to-peer transfer of electronic payments in a fast, easy and decentralized manner. It operates on a permissionless format so that consumers and businesses can make and receive payments in a quick and efficient manner.
Bitcoin Cash is available for trading on several leading cryptocurrency exchanges, depending on the country that you are based in. Some of the crypto exchanges that support trading in BCH include Coinbase, CoinEx, Kraken, eToro, Gemini and Bittrex.
You can store your capital in the form of Bitcoin Cash in wallets as well as on the exchanges, although this is not recommended as exchanges are more vulnerable to be hacked. Some of the leading wallets that support storage of BCH include Bitcoin.com, Bitpay, Ledger, Trezor, Exodus, CoinSpace and Jaxx.
Apart from trading it against fiat currencies and other cryptocurrencies, Bitcoin Cash can be used to purchase various goods and services online as well as offline. Over 5,000 offline stores and eCommerce outlets allow consumers to pay in BCH, such as Coinbase Commerce, BCH.games, lazyfox.io, GitCash, ChainTrip, NameCheap, Blockchair, TxStreet and fork.lol.
Most countries worldwide allow their citizens to buy, hold, trade and sell cryptocurrencies, including Bitcoin Cash. However, in some countries like Iran, Bolivia, and North Macedonia, it is considered illegal to use digital currencies. We recommend that you study up carefully on your country’s existing and upcoming regulations regarding cryptocurrencies before buying Bitcoin Cash.
The UK is yet to formally introduce regulations exclusively catering to the world of cryptocurrencies, although it has permitted its citizens to hold and trade in them. However, the FCA - the UK's financial regulatory authority has deemed it necessary for firms operating in this space to register and ensure full compliance with its regulations on anti-money laundering and terror financing.
As we discussed previously, cryptocurrencies are largely unregulated, making them subject to higher levels of volatility and unpredictability than conventional financial assets. As a result, the risks in trading digital currencies are also higher. However, it helps if you conduct an in-depth research into how cryptocurrencies function and the latest developments surrounding Bitcoin Cash before beginning to trade in it. This can help limit your exposure to risks when trading BCH.