Bitcoin Cash Halving Looms as Market Sentiment Dampens Price

As the anticipated Bitcoin Cash halving approaches, its price has retraced from $702 to $630. The halving, scheduled for Tuesday, will reduce the block reward from 6.25 BCH to 3.12 BCH, impacting the coin's supply and potentially influencing its market value. The halving is expected to increase the mining difficulty and hash rate, with the latter currently standing at 4.50 EH/s, a significant rise from its earlier low.

Bitcoin Cash Halving Looms, Market Sentiment Dampens Price

The cryptocurrency market has witnessed a decline in the price of Bitcoin Cash (BCH) for the second consecutive day, as traders eagerly anticipate the upcoming halving event. After reaching a peak of $702 on Monday, the BCH price has retreated to $630, reflecting a shift towards bearish sentiment within the crypto sector.

Bitcoin Cash Halving: A Significant Cryptocurrency Event

This week's most anticipated cryptocurrency event is the Bitcoin Cash halving, scheduled to occur on Tuesday when the block height reaches 840,000 from the current 839,773. This event will witness a significant reduction in the block reward, decreasing from 6.25 BCH to 3.125 BCH. Consequently, the rate at which new Bitcoin Cash coins are generated will be reduced by half, an event that occurs every four years.

The BCH halving precedes the highly anticipated Bitcoin (BTC) halving by several weeks, which will similarly reduce the number of newly mined coins per day to approximately 450.

Halving's Impact on Bitcoin and Bitcoin Cash Prices

Halving events play a crucial role in modulating the supply of Bitcoin and BCH, thereby influencing their prices. Similar to OPEC's role in regulating oil production by its members, halving events implement an incorruptible software-based approach to controlling coin issuance.

The upcoming BCH halving is expected to result in an increase in mining difficulty and hash rate. Data from BTC.com indicates that the hash rate has surged to 4.50 EH/s, significantly higher than the year's low of 2.50 EH/s.

Hash rate serves as an indicator of a network's health by measuring the computational power utilized for cryptocurrency mining. Additionally, Bitcoin Cash's mining difficulty has been on a steady upward trend, currently approaching its all-time high.

Bitcoin Cash Price Forecast: Bearish Outlook

Historically, the BCH price has exhibited a tendency to track the price of BTC, with many investors utilizing BCH as a more affordable proxy for Bitcoin. The current BCH/BTC ratio stands at approximately 120, indicating that one Bitcoin is worth 120 BCH coins.

However, one of the primary challenges confronting BCH is its classification as a "zombie coin," implying that it has not gained widespread adoption among hodlers.

Analyzing the daily chart, it is evident that the BCH price has been on a strong upward trajectory in recent months, surpassing a key resistance level of $528 in March. Notably, this resistance level had not been breached since March 3rd.

Bitcoin Cash has maintained its position above the 50-day moving average. However, it has recently formed a shooting star pattern, a widely recognized bearish indicator, and the Relative Strength Index (RSI) has declined, suggesting a downward trend.

Consequently, the outlook for the BCH price is bearish, with immediate support at $526. This decline can be attributed to investors selling in anticipation of the halving event.

A pullback to $526 would represent a positive development for Bitcoin Cash, as it would confirm a "break-and-retest" pattern. This pattern involves an asset crossing a key resistance level, retracing to test it, and subsequently resuming its original trend.