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One Month Later, Which Crypto Is Winning the Bitcoin Cash Split?

One month has officially passed since the bitcoin cash blockchain underwent a hard fork on November 15, resulting in the creation of two distinct networks.

They’re now commonly referred to as Bitcoin Cash ABC and Bitcoin SV. Yet in the weeks that followed the mid-November fracture, there is still no favorite in terms of overall price.

Bitcoin cash is designed in such a way that, every six months, its users must ‘fork’ the blockchain and adopt a software upgrade with changes determined by the project’s open-source software developers.

If the developers and miners reach consensus as to what the upgrades should be, the main chain stays intact and simply adopts the software upgrade known as a ‘soft fork’.

All bitcoin cash forks had fallen under the ‘soft’ category, but circumstances were different with the latest fork. This time around, the upgrades could not be agreed upon and tension grew among developers, so the main chain experienced a divisive hard fork – in other words, it split into two separate chains with their own cryptocurrencies.

Since the fork, both BCHABC and BSV have been trading on public cryptocurrency exchanges like Binance and Coinbase, but after 30 days of wild volatility and drastic swings in hash power, their prices stand just $10 apart.

Where are they now?

Bitcoin cash prices reached a peak of $621 in November but had fallen 32 percent to $421 on Nov. 14, the day before the scheduled fork. according to CoinDesk’s pricing data.

After the split, the two newly created cryptocurrencies bitcoin cash ABC and Bitcoin SV hit the market and began trading at $295 and $90 respectively on the Binance exchange.

It should be noted that multiple exchanges including Poloniex and Bitfinex engaged in ‘pre fork trading’ before the fork took place.

These experimental markets involved the trading of ‘IOU’ token place holders for BCHABC and BSV redeemable post-fork, theoretically allowing exchange users to decide amongst themselves which fork to support.

For much of November, BCHABC was the distinct price leader, at times valued as much as 10 times that of its counterpart.

The difference between the two narrowed as the month elapsed, so much so that Bitcoin SV was able to take a brief price lead on Dec. 6.

Since the fork, the broader cryptocurrency market has witnessed a significant sell-off of more than $80 billion in terms of total capitalization. As a result, the two forks depreciated greatly in price.

At the time of writing, BCHABC (currently trading under the BCH ticker on many exchanges) is valued at just $80, while BSV is $70, according to CoinMarketCap, so it’s clear the public has yet to pick an undisputed favorite.

Looking forward

While the long term success of BCHABC and BSV will likely be dictated by usage and hash power, technical analysis can be applied to their price charts so a more immediate direction of the assets prices can be anticipated.

As can be seen in the BSV/USDT chart above, price began forming a bearish consolidation pattern known as the descending triangle on Nov. 26, which broke down on Dec. 16. 

The break of triangle support at $84 opened the doors for more depreciation with just two notable support levels nearby: $74 and $54. Based on the large size of the triangle pattern, it seems the lower support level is likely to be reached although the oversold conditions seen on the intraday relative strength index (RSI) may slow the fall.

There is less to glean from the BCHABC chart since it has been in a steady, near 80 percent downtrend ever since hitting the market.

With no known support levels nearby, it’s difficult to predict where its price may eventually pick up bid although oversold conditions are evident on the higher time frame charts, so sellers may soon take a breather allowing for a corrective bounce.

Needless to say, it’s unlikely either of the newly forked cryptocurrencies pick up strong big until bitcoin and the broader market does as well.

Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.

Locked forks image via Shutterstock; charts by TradingView

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Bitcoin Price Consolidates Sub-$3.5K With Bulls and Bears in Stalemate

Bitcoin (BTC) is consolidating below $3,500 for the third day straight.

The challenge now is to gauge whether the bulls or the bears will win out in the coming days.

As discussed yesterday, the leading cryptocurrency could soon see a corrective rally if prices manage to clear the crucial resistance at $3,633 (the high of an “inverted hammer” candle on the 3-day chart) by Friday’s UTC close.

The bull case is also bolstered by bitcoin’s 14-week relative strength index, which is reporting oversold conditions for the first time since January 2015. A corrective rally, therefore, looks overdue.

The odds of a move above $3,633 would rise if BTC’s five-day-long narrowing price range ends with a bullish breakout. As of writing, the upper edge of the price range is located at $3,456 and the lower edge is seen at $3,360.

However, it’s worth remembering that BTC has repeatedly struggled to score a significant and lasting rally in recent weeks, despite the very oversold conditions.

BTC is currently trading at $3,400 on Bitstamp, representing a 0.75 percent drop on a 24-hour basis.

Hourly Chart

BTC has created a symmetrical triangle (narrowing price range) on the hourly chart. A bull breakout would validate the argument put forward by the 3-day inverted hammer candle that bargain hunters are beginning to challenge the bears’ resolve to push prices lower.

As a result, the triangle breakout, if confirmed, could yield a quick move higher to $3,633.

BTC, however, risks falling to the 200-week moving average (MA) of $3,179 if prices pierce the triangle support of $3,360. That long-term MA support will likely hold ground, as the 14-week RSI is reporting extreme oversold conditions.

6-hour chart

Many market technicians believe that a break of an RSI trendline often precedes the break of a trendline in price.

Going by that logic, the falling channel breakout in the 6-hour chart RSI could be considered an advance warning of an impending bullish price move.

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  • Bitcoin could see a stronger recovery rally if prices close above $3,633 on Friday.
  • A symmetrical triangle breakout on the hourly chart would boost the probability of BTC finding acceptance above $3,633.
  • A symmetrical triangle breakdown would be a bearish development, although downside could be restricted around the 200-week MA of $3,179.
  • That said, the bullish scenario looks more likely to play out, as the 14-week RSI is signaling extreme oversold conditions and the 6-hour RSI is biased toward bulls.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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Bitcoin Price Charts Indicate Glimmer of Hope for Corrective Rally

Bitcoin’s (BTC) struggle to build a notable bounce could end if prices beat key resistance above $3,600.

The leading cryptocurrency by market value fell to 15-month lows near $3,200 last week, pushing the 14-week relative strength index (RSI) below 30.00 for the first time since 2015.

So, with bitcoin so extremely oversold, a recovery rally cannot be ruled out – more so because there is evidence of bargain hunters challenging the bears’ resolve to push prices lower.

For instance, BTC posted a three-day candle on Dec. 8 that closed below support at $3,463 (low of multiple three-day candles in September 2017), bolstering the already bearish technical setup. Despite that, BTC not only avoided a drop to $3,000 in the last 72 hours but also hit a high of $3,633, if briefly.

Nevertheless, the fact that prices were able to defy the bearish setup indicates that the bulls are beginning to flex a little muscle.

Therefore, a stronger rally could unfold if prices manage to cross the newfound resistance of $3,633 in the next 48 hours or so.

As of writing, BTC is trading at $3,414 on Bitstamp, having clocked a low of $3,325 earlier today.

3-day chart

As seen above, bitcoin has charted an “inverted hammer” candle, which occurs when prices see a brief rally during a downtrend. It is widely considered a sign of potential trend reversal.

The bullish reversal, however, would be confirmed if the follow-through is positive, that is, the current 3-day candle needs to close above $3,633 on Friday.

That could see prices open up upside toward the psychological resistance of $4,000.

Daily chart

On the daily chart, the 14-day RSI has posted a higher low as opposed to the lower low on price, meaning the indicator is diverging in favor of the bulls.

However, again, a high-volume move above $3,633 is needed to confirm a short-term bullish reversal.

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  • A convincing move above $3,633 would validate the inverted hammer candle seen in the 3-day chart and open the doors for a stronger corrective rally to $4,000.
  • A break above $3,633 would also confirm a bullish divergence of the 14-day RSI and open up upside on the daily chart toward $4,400 (Nov. 29 high).
  • A break below the recent low of $3,210 would reinforce the overall bearish view, although oversold conditions on the 14-week RSI could limit the downside around $3,000.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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Ether Price Now Down 94% from January’s Record High

The price of ether fell to 19-month lows just over $80 today and is now down 94% from its January peak.

Ether’s dollar-denominated exchange rate (ETH/USD) slipped to $81.30 at 02:15 UTC – the lowest level since May 2, 2017 – according to CoinDesk’s Ethereum Price Index (EPI).

As of writing, ETH is trading at $83.00, representing a 17.8 percent drop on a 24-hour basis. Just three weeks ago, it was teasing a short-term bullish reversal above $200.

That key support (now resistance), however, was breached on Nov. 14, as bitcoin’s drop below the crucial support of $6,000 dashed hopes of a major bullish reversal, leading to broad-based risk aversion in the cryptomarkets.

Ether prices have dropped close to 60 percent in the time since and are currently down a staggering 94 percent from the record high of $1,431 hit in January.

So, it is not surprising that bearish sentiment has reached extremes, as seen in the chart below.

ETH/USD shorts at record high

Notably, ETH/USD short positions on cryptocurrency exchange Bitfinex rose to a record high above 340,000 soon before press time – up 183 percent in the last three weeks. Meanwhile, long positions have dropped to the lowest since Sept. 12, as seen in the chart above.

Such extreme positioning is usually a sign of oversold conditions and presages market bottoms. However, calling a bullish reversal with that information alone could prove costly.

The outlook, therefore, remains bearish until a more credible evidence of trend reversal emerges.

Weekly chart

As seen above, ETH created a small doji candle last week, implying bearish exhaustion. That pattern, however, has been invalidated with the drop to 19-month lows.

Moreover, ether has found acceptance below $102.20 (low of the doji candle), meaning the sell-off from $200 has resumed.

The chart also shows that 5- and 10-week simple moving averages (SMAs) are trending south.

As a result of all these bear indicators, ETH may extend the decline toward the next major support lined up at $59.00 (March 2017 low).

We can, though, expect the momentum may weaken somewhat, as the 14-week relative strength index (RSI) is reporting oversold conditions for the first time December 2016.

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  • ETH may test crucial support at $59.00 (March 2017 low) in the near-term.
  • With oversold readings on the weekly RSI and bearish sentiment at record highs, there is always a risk of a sudden corrective rally. The outlook, however, would turn bullish only if ETH violates the recent bearish lower-high pattern with a daily close above $128.00 (Nov. 28 high).

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Ether image via Shutterstock; charts by Trading View

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Bitcoin Still on Defensive But Price Rally Possible Over $3.9K

Bitcoin (BTC) remains on the defensive despite a 4-percent recovery from nine-day lows today, but bearish pressure may weaken if prices rise above key resistance near $3,900.

The world’s largest cryptocurrency by market capitalization fell to $3,629 at 05:00 UTC on Bitstamp – its lowest level since Nov. 27. At press time, the price stood at $3,770, representing a 1.5 percent drop on a 24-hour basis.

Despite the quick recovery, the odds appear to be stacked in favor of a drop to recent lows below $3,500.

To start with, BTC closed below $3,711 yesterday, invalidating the short-term bullish reversal signaled by last Wednesday’s 11 percent gains. The daily close also added credence to the bearish lower high carved out near $4,400 in the last few days.

Added to that, the bearish setup on the long duration charts suggests strong potential for a deeper sell-off.

That said, a minor recovery rally could be seen if prices cross resistance at $3,882 – upper edge of the falling wedge pattern – seen in the chart below.

Hourly chart

As seen above, BTC suffered a symmetrical triangle breakdown yesterday, signaling an end of the corrective bounce and a resumption of the sell-off.

So, the immediate outlook remains bearish as long as prices are holding below the lower edge of the symmetrical triangle pattern (former support), currently at $3,850.

BTC, however, has also established a falling wedge –  a bullish reversal pattern. Therefore, the outlook as per the hourly chart would turn bullish if prices cross $3,882 (upper edge of the wedge).

The breakout, if confirmed, would open up upside toward $4,265 (Dec. 2 high) and possibly to $4,410 (Nov. 29 high).

Securing that bullish breakout, however, could prove a tough task, as the major moving averages (50-, 100- and 200-hour) are trending south in favor of the bears.

Securing that bullish breakout, however, could prove a tough task, as the major moving averages (50-, 100-, and 200-hour) are trending south in favor of the bears.

Daily chart

Over on the daily chart, the lower high pattern, yesterday’s bearish close below $3,771 and the downward sloping 5- and 10-day exponential moving averages (MAs) continue to favor a re-test of $3,474 (Nov. 25 low).

Notably, BTC struggled to close above the 10-day EMA during the recent corrective bounce. So, a daily close above that EMA, if and when it occurs, could be considered an advance signal of an impending bullish move.

That said, a more credible evidence of a trend reversal would be a convincing break above $4,400.

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  • The probability of a drop to the recent low of $3,474 remains high while prices are trading below resistance near $3,900.
  • A break below $3,629 (daily low) will likely bring a speedy drop toward $3,474 (Nov. 25 low). A close below that would bolster the long-term bearish technicals and allow potential for a drop to psychological support at $3,000.
  • A falling wedge breakout on the hourly chart, if confirmed, would open up upside toward $4,265 (Dec. 2 high), above which major resistance is seen a $4,410 (Nov. 29 high).

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; price charts by Trading View