Bitcoin Cash
The Bitcoin cash price is struggling even after a series of good news from the industry. BCH is trading at $470, which is slightly higher than the intraday low of $442. Its market capitalization has dropped to more than $8.8 billion.
What happened: There have been several encouraging news about Bitcoin in the past 24 hours. First, Tesla started accepting payments in Bitcoin, as the company had hinted before. It now becomes the biggest company to accept the currency.
Second, in a filing with the Securities and Excange Commission (SEC), Fidelity, the giant financial company, said that it would soon launch a Bitcoin ETF. The fund will be an ideal vehicle for most institutional investors, who are now paying a premium to access the Greyscale Bitcoin Trust.
All this matters to Bitcoin Cash because its price tends to track that of the Bitcoin. Many investors buy the BCH because it is a relatively cheaper option than BTC.
It is also worth noting that the BCH price is falling at a time when US treasury bonds are rising. The longer and shorter-dated bond yields has rallied as investors start pricing-in higher inflation.
On Tuesday, I warned that the Bitcoin Cash price would likely drop to $470. I pointed to the then head and shoulders pattern that has been forming. This forecast was correct as the price dropped to $470 and moved below.
Today, it remains below the short and longer term moving averages. It is also below the neckline of the head and shoulders pattern. Therefore, in my view, the BCH price is still vulnerable of dropping to about $400. However, we should not rule out a move to $500 as investors rush to buy the dips.
