Bitcoin Cash price retreated for the second day as traders focused on the upcoming halving event. After peaking at $702 on Monday, the BCH price pulled back to $630 as sentiment in the crypto industry worsened.
Bitcoin Cash halving
The biggest crypto news of this week will be the upcoming Bitcoin Cash halving, which is set to happen on Tuesday when the block height rises to 840,00 from the current 839,773.
This event will see the current block reward retreat from 6.25 BCH to 3.12 BCH. As a result, it will reduce the rate at which new Bitcoin Cash coins are generated. It happens after every four years.
The BCH halving will happen a few weeks ahead of the closely-watched Bitcoin halving, which will reduce the number of new coins that are produced per day to about 450.
Halving is an important aspect of Bitcoin and BCH prices in that it helps to moderate the amount of coins that are produced every day. Think of it as OPEC, the cartel that regulates the amount of oil that members produce each day. But in this case, it is an incorruptible approach since it is built in the software.
Bitcoin Cash halving will lead to an increase in the mining difficulty and hash rate. Data by BTC.com shows that the hash rate has jumped to 4.50 EH/s, much higher than the year-to-date low of 2.50 EH/s.
Hashrate is an important metric in the proof-of-work coins because it shows the health of the network. It does this by measuring the computational power per second used when mining a cryptocurrency. It is also seen as the speed of mining. Bitcoin Cash’s difficulty has also been in a strong uptrend and is sitting near its all-time high.
Bitcoin Cash price forecast
Fundamentally, the BCH price tends to track the price of BTC. Many buyers use it as a proxy for the BTC, which is much more expensive. The BCH/BTC ratio has moved to $120, meaning that one Bitcoin is worth 120 BCH coins.
The biggest challenge for BCH, however, is that it is one of the top zombie coins, meaning that it is not widely used by holders.
Turning to the daily chart, we see that the Bitcoin Cash price has been in a strong uptrend in the past few months. It crossed the crucial resistance at $528 in March. This was a notable price since it was its highest point on March 3rd.
Bitcoin Cash has remained above the 50-day moving average. Recently, however, it has formed a shooting star pattern, which is a popular bearish sign and the Relative Strength Index (RSI) has pointed downwards.
Therefore, the outlook for the BCH price is bearish, with the next target to watch being at $526. This retreat will happen as investors sell the halving news.
A drop to $526 will be a positive thing for Bitcoin Cash since it will be a break-and-retest pattern. That is a situation where an asset crosses a key resistance, retests it, and then resumes the original trend.
