Bitcoin Cash Jumps 24% To Three-Year High On Network Upgrades

Summary:

The Bitcoin Cash price has set a new record for 2020 overnight. Trading as high as $1,485 ahead of May 15th network upgrades.

The Bitcoin Cash price has set a new record for 2020 overnight. Trading as high as $1,485 ahead of May 15th network upgrades.

The proposed changes to the network come after users requested removing the unconfirmed chained transaction limit, which currently sets a cap of 50 such transactions at a time. The coming upgrade will remove this limit, enabling higher capacity transactions for the apps and websites that offer the coin as a payment solution.

As you would expect, the Bitcoin cash price has reacted favorably to the announcement. Today’s leg higher has seen the coin return 23% in early Asian trade and +50% over the last 7 trading days.

This new valuation takes the market cap to over $25 Billion once more and will undoubtedly have investors wondering if the Bitcoin Cash price has a chance of reaching the April 2018 high at $1,844. .

Technical outlook

The technicals are improving. If the Bitcoin cash price maintains its current trajectory, I see the potential for a test of the 2018 highs in the not-too-distant future.

The daily chart shows us that the recent rally has seen the Bitcoin cash price clear the $1,320 resistance level, which came from an ascending trend line in place since the November 2020 high at $380.

After reaching the overnight peak of $1,485, the rally ran out of steam and retreated to the $1,320 area. This previous resistance level now turns support, and the market duly bounced to its current $1,360. This is typical of a bullish breakout, with the market often retesting the previous resistance level before resuming its path higher.

For me, today’s performance will be key in dictating the next material move in the Bitcoin cash price. If the market can establish itself above the $1,320 level, I see an increased chance of returning to the 2018 highs.

A failure to maintain this mark on a closing basis could see the Bitcoin cash price fall back into this channel, targeting support at April’s $1,216 high and below that the psychological $1000 level.