Bitcoin Cash (BCH) has recently dominated the headlines with massive gains in the current overall crypto market rally. Its price recently surged over 200% this month after being listed on EDX Markets, a new exchange backed by major institutions.
Trading also spiked on Upbit, a major Korean exchange. This led to a significant increase in the total hash rate and mining difficulty as miners migrated to the blockchain to chase profits.
Bitcoin Cash Hash Rate Reaches Highest In Two Years
According to data from CoinWarz, the BCH hash rate jumped to over 5.45 EH/s in the closing hours of June, reaching its highest point in over two years. The increased hash power means the BCH network has become increasingly secure as miners move to the blockchain. Mining difficulty also followed suit, jumping to 494.8 G in less than a day.
While frequent difficulty adjustments can impact mining profits in the short run, the heightened interest in mining Bitcoin Cash is a good sign for the network.
BCH mining difficulty touches two-year highs | Source: CoinWarz
The rally in Bitcoin Cash’s price and mining metrics has put pressure on those short-selling BCH futures contracts. The total amount of money lost on BCH-tracked futures shorts and longs combined was over $25 million, which is the largest in over two years.
All of this comes ahead of the Bitcoin Cash Halving, an event that is expected to happen in May 2024, cutting block rewards in half. The rapid rise in mining difficulty and hash rate could be linked to this. However, given that it is almost a year away, it is more likely that the altcoin’s recovery and price movements over the last week are the culprit.
BCH Price Action
The future price outlook for Bitcoin Cash remains highly uncertain, given that the current rally came as a surprise to many investors. The next several weeks will be extremely important in determining whether or not this rally has sufficient energy to drive Bitcoin Cash to new highs in 2023 or whether or not it fizzles out.
BCH holds steady at $288 | Source: BCHUSDT on TradingView.com
Currently, BCH seems overbought from various indicators like the Relative Strength Index. Overbought means an extended price move to the upside. Price action seems to have become calm, as the cryptocurrency is now facing rejection around $300.
The 50-day and 200-day MAs seem to suggest that the price increases may continue. However, if the current momentum stalls and BCH faces a strong rejection, the BCH price could erase most of its recent gains.
BCH is now trading at $288 and is down 1.31% in the past 24 hours. BCH’s price rise saw its market cap jump to over 5.58 billion, making it the 14th-largest cryptocurrency in the space.
Featured image from Finbold, chart from TradingView.com