Bitcoin Cash fundamental analysis, based on the recent news and released open-sourced reporting
In this post I applied: fundamental analysis and some elements of technical analysis
Dear friends,
I continue my series of price predictions. Today, I’d like to dwell upon the recent news about Bitcoin Cash. There have two sensations about this coin during the recent week. The first one reads that some Cory Fields, one of Bitcoin Core developers, found a serious vulnerability in Bitcoin Cash protocol, which would have caused the consensus protocol to fail completely by causing the bad block to divide the digital currency into two, hindering transactions. Here, Cory should be appreciated for his responsible attitude towards this problem, as he and revealed the flaw as early as on April 25, but published the information only on August 9 (it is published here), when he was completely sure that Bitcoin Cash developers has corrected the problem.
Although, Cory wrote about the vulnerability already after they had solved the problem, the news bit has shocked all the coin holders like a cold shower. As the developers have already made such a mistake once, then who guarantees that similar errors won’t occur again during the future updating of Bitcoin Cash chain, planned for November?
After such information, BCHBTC completely broke through its last support and dropped far lower, to the psychologically important level 500 USD (see the BCH price chart above).
As you see in the chart above, Bitcoin, the cryptocurrency market benchmark, performs far better than BCH. It proves BCash fundamental weakness and zero interest of big buyers at the current levels.
It is already rather long ago when in the crypto media, there appeared the news about strong centralization of Bitcoin Cash. The original source of this information was the notorious BitPico group that once promised to make Roger Ver cry and was trhreatening to ruin Bitcoin Cash as a cryptocurrency asset.
As it turned out later, BitPico project itself, as well as all its activities, was rather doubtful. This account deleted all its twitts, leaving only the last one that due to strong Bitcoin manipulation they were not interested in anymore and didn’t see any growth-prospects. Moreover, they would sell their mining farms and suspend their activity (it is in descent terms, the original post is below).
Such strange behaviour makes me feel that this project, the information and how it was presenting it, it’s nothing else but another means of Bitcoin Cash promotion and a tool to manipulate BCH rate.
So, I don’t rule out that the talks about BCH centralization, which were published, are strongly exaggerated.
Nevertheless, there is one, very powerful player in the Bitcoin Cash market. As it has been disclosed recently form the open-sourced Bitmain reporting, the latter much increased its share in BCH, according to the information dated March 31.
Although this piece of information appeared just a few days ago, many media interpret it in a wrong way.
The matter is that the presented data are relevant for March 31; and if you look at the chart below, you’ll see that BCHUSD ticker was rather up after that.
Finally, I would claim that, with the price surge from 600 USD up to 1800 USD, Bitmain managed to play back a part of positions and take the profit, so I still wonder, whether the company suffered from real losses, caused by its investment portfolio.
In the chart above, you see that the last cycle in the chart is supported by large volume; besides, you see a series of jumps, which can be explained by a very strong whales’ dump.
If I continue this idea, Bitmain, on the contrary, should have gained by selling off its portfolio, after the buyout at the lows.
Of courses, if this scheme has worked out once, manipulators will apply it further; and so, they are interested in pressing BCH as deep as possible, to the very lows. Holding large stocks of BCH, the whales of such scope can easily do it.
In the end, I see an obvious scenario, where BCH will be dumped towards the lows of November, 2017, when Bitcoin Cash was just launched.
This level is around 300 USD, to be more precise, at about 280.1.
In the one-week chart above, this target is quite clear for all the market participants.
If manipulators mange to shake the boat and make bears dump the market down, then, without waiting until BCH price drops to the very lows, they will be systematically buying out Bitcoin Cash, creating another pump in the end.
Many media claim that Bitmain puts off the release of its reporting for the second quarter on purpose, trying to conceal the fact of big financial losses. I, personally, think it makes no sense to hide this fact because the huge cryptocurrency accounts of the company became known after the first report.
As it is clear from the report dated March 31, Bitmain held the following assets:
Bitcoin Cash – 1.021,316 BCH
Bitcoin – 22.082 BTC
Litecoin – 930.932 LTC
Dash – 312.424 DASH
Ethereum – 1.097 ETH
According to these figures, it would be stupid to hide the information about the financial losses, as it will obvious for anybody, not even an expert in technical analysis, if they look at the chart of any cryptocurrency asset.
If I were Jihan Wu, I would worry that the information about crypto market manipulation might be released in the reports for investors, because it would really damage the company’s reputation; and, in addition, would suggest sanctions by SEC and other regulators.
Summary:
From a fundamental point of view, Bitcoin Cash is very weak and is likely to go on falling down. BCH price has broken through all the strong key levels and the psychologically important level of 500 USD.
According to technical analysis, the target for bears is around 280 USD; however, taking into account the huge amount of manipulators’ funds, they are likely to buy out the cryptocurrency, when its price is close to lows, without letting the majority of speculators join the rocket.
In the end, I suggest the BCH price is likely to exit the bearish channel at about 400 USD-360 USD.
That is my BCHUSD fundamental analysis; let’s follow Bitcoin Cash rate.
I wish you good luck and good profits!
Mikhail @Hyipov
