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Bitcoin Cash Struggles Against Resistance Ahead of Block Size Increase

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Bitcoin Cash

The price of Bitcoin Cash reversed sharply from $1,500 last week. This has reinforced $1,500 as a key resistance level ahead of the hard fork scheduled for tomorrow (15 May). All eyes are now on that level as a break could see BCH displacing Ripple’s XRP as the third most valuable cryptocurrency, bringing more buyers to the market.

Fundamental View

Market participants continue to hold widely conflicting views about Bitcoin Cash. However, it’s important to note that its price performance has been better than most had expected, and it has managed to retain a strong following.

As far as adoption of Bitcoin Cash goes, there is little evidence that it is outperforming Bitcoin Core. As of March, Bitcoin Segwit transaction alone outnumbered transactions on the Bitcoin Cash blockchain.

Tomorrow’s hard fork will result in the block size for BCH being increased to 32 MB, which will allow more transactions to be to be included in each block. Critics have pointed out that given the current number of transactions currently taking place, this is unnecessary.

Since launching, BCH has mostly traded at between 7.5 and 20 percent of the value of BTC. It’s currently trading at around 16.5 percent of BTC’s value, and mean reversion would suggest a move back toward 12 percent – or $1,000 at current BTC prices. That is unless the long-term relationship is going to change in BCH’s favour.

Bitcoin Cash vs. Bitcoin Core (Image Credit: www.tradingview.com)

The Technical Picture

Bitcoin Cash rallied over 200 percent from a low of just above $600 on 6th April. Since reaching a high of $1,844 on 6th May, the price action has been bearish with a series of lower lows and lower highs.

Bitcoin Cash Price Action Since 6th April Low (Image Credit: www.tradingview.com)

Trendline resistance now coincides with horizontal resistance at $1,500. A break above this level may well result in an explosive move to the upside. This would likely result in BCH becoming the third largest cryptocurrency and bring new buyers to the market.

However, a rally may not be sustainable in the long term unless there is news that supports a rally or significant new buying across the broader cryptocurrency market.

If on the other hand, support at $1,275 and $1,236 give way, the bearish trend will be confirmed.

Conclusion

The bulls are looking for BCH to break $1,500 following tomorrow’s hard fork. If that level does break, new buyers may be attracted to the market and the price would quickly reach $1,655 and possibly $1,848. Beyond that, the market will be looking for news to support a longer-term rally.

If, however, support at $1,275 and $1,236 is broken, traders may wish to hold short positions until the trendline is broken – it’s possible that the price may retrace all the way to $600.

This article was written by FX Empire

Bitcoin

Bitcoin Price Dumps Below $41,000 Amid Uncertainty

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Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.

Fundamentals

Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.

Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.

Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.

Last week on Thursday, cryptocurrency experts took notice of…

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Bitcoin

Bitcoin Price is in Consolidation Mode Despite Market Optimism Post-Fed Decision

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Bitcoin price edged lower on Thursday despite optimism in wider markets on the back of the Fed’s interest rate decision. The flagship cryptocurrency has been consolidating above the critical level of $42,000 after briefly topping $44,000, its highest level in 20 months. Bitcoin was trading 0.71% lower at $42,569 at press time. BTC’s total market cap has increased by more than 3% over the last day to $832 billion, while the total volume of the asset traded over the same period jumped by 22%.

Economic Outlook

Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.

The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.

Additionally, the central bank indicated that three rate…

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Bitcoin Price Blasts $44K in Spectacular Surge as Spot Bitcoin ETF Approval Looms Large

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Bitcoin price has been hovering above the $43,000 psychological level over the past two days amid anticipation about the potential approval of a spot bitcoin ETF. The flagship cryptocurrency has climbed more than 16% in the past week and nearly 170% in the year to date. Bitcoin’s total market cap has increased by nearly 5% over the past 24 hours to $858.9 billion, while the total volume of the token traded rose by 43%. The Bitcoin price was trading at $43,914 at press time.

Fundamentals

Bitcoin price has posted significant gains over the past few days, climbing to its highest level since April 2022, before the crash of a stablecoin that started a litany of company failures, pummeling crypto prices. The world’s largest cryptocurrency briefly topped the crucial level of $44,000 on Wednesday amid rising momentum despite being massively overbought.

According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.

Investors have already started providing capital as seed money for ETF products. Notably, a recent report by CoinDesk showed that the world’s largest fund manager, BlackRock, received $100,000 in capital from a seed investor for its spot bitcoin exchange-traded fund…

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