Bitcoin Cash (BCH) has enjoyed 61% spike this past month. However, a recent pullback has left investors wondering if this was a fleeting pump or the start of a sustained rally. Let’s delve deeper into the factors that fueled BCH’s ascent and explore the potential roadblocks ahead.

Bitcoin Cash Gets A Shot in the Arm from the SEC Chair

In a noteworthy development, the SEC chairman publicly acknowledged BCH as one of the major crypto assets alongside giants like Bitcoin (BTC) and Ethereum (ETH). This seemingly simple recognition cast a spotlight on BCH, potentially attracting investors who value stability and established names in the cryptocurrency landscape.

Built for Speed: Scalability Solutions Attract Users

One of BCH’s core strengths lies in its focus on faster transaction processing compared to Bitcoin. Bitcoin’s notorious scalability issues have frustrated users for years, and BCH’s solutions might be appealing to those seeking a quicker and more efficient way to transact. This focus on real-world usability could be another factor contributing to BCH’s recent gains.

Cautionary Signs Emerge: Shifting Ownership

A cause for concern is the recent shift in ownership structure. Data reveals a growing dominance of short-term holders, those who hold BCH for less than a month. This influx of traders, known for their tendency to buy and sell quickly based on short-term price movements, could inject significant volatility into the BCH market.

The Bitcoin Cash Halving: A Catalyst or a Cliffhanger?

The upcoming Bitcoin Cash halving on April 4th, 2024, adds another layer of complexity to the BCH story. During a halving event, the block reward for miners is cut in half. Historically, the 2020 BCH halving was followed by a significant price increase.

However, the current market conditions differ. The dominance of short-term holders and potential downward pressure from miners selling BCH before the halving create uncertainty. Will the halving act as a catalyst, or will it exacerbate the existing selling pressure?

BCH/USD Technical Analysis Paints a Murky Picture

As of March 13, 2024, BCH is hovering around $446. Support levels lie at $415 and $402, with a critical support zone at $388. If the price falls below this critical zone, a further drop to $375 becomes a possibility. On the flip side, resistance sits at $428, $438, and $465. A decisive break above $465 could propel BCH towards $750, but this major resistance level would present a significant challenge.

The technical analysis paints an uncertain picture. The flattening moving averages suggest stalling momentum, further amplifying the need for caution.