Bitcoin cash is on fire today.
As per CoinMarketCap data, the bitcoin cash-U.S. dollar (BCH/USD) exchange rate rose to a three-month high of $872.24 at 11:29 UTC. The cryptocurrency’s record all-time high of $920 was set on Aug. 19.
As of writing, the cryptocurrency is trading at $800, and has climbed 27 percent over the last 24 hours. On a monthly basis, BCH is now up a staggering 150 percent.
The price gains come amid rising speculation that the surprise cancellation of the Segwit2x hard fork this week means bitcoin could become more of a “store of value,” rather than a specialized protocol for day-to-day payments.
So far, the news appears to have strengthened the appeal of alternatives seeking to better serve this use case.
For example, bitcoin cash supporters have been boasting its appeal as a network with larger blocks (and therefore, theoretically, more capacity), encouraging some investors to move out of bitcoin and into bitcoin cash. A few supporters are even going so far as to envision an eventual (but probably unlikely) “flippening” to occur if BCH overtakes bitcoin.
Still, CoinMarketCap data also shows that the BCH rally is being fuelled by exchanges offering BCH/KRW pairs and BCH/BTC pairs.
So will the rally continue? The price action analysis points to short-term overbought conditions and a possible upcoming correction.
The chart above shows:
- Prices rallied sharply following a bull flag breakout (a bullish continuation pattern and resembles flag and pole).
- The relative strength index is overbought.
- A short-term correction cannot be ruled out, given the overbought conditions, although broader outlook remains bullish as long as prices hold above $600 levels.
- Overall, bitcoin cash looks set to set new record highs above $1,000, courtesy of the bull flag breakout. As per the textbook rules, the rally following the breakout equals the height of the pole. Accordingly, the doors have been opened for a rally to $1027 levels.