A red wave attacked the cryptocurrency market right before the Bitcoin Cash hard fork that I talked about a few weeks ago. Bitcoin Cash (BCH) saw the steepest losses in the top ten cryptocurrencies, losing over 15% by the end of Wednesday’s New York trading session. Bitcoin (BTC) tested below the $6,000 psychological support level and briefly touched the lows of back in 2017 at $5,682. This created an enticing buying opportunity. Now the question is, will the cryptocurrency market bottom out after hitting the lows?
About The Red Wave
We had been waiting for this red wave for a very long time. Personally, I was getting a bit impatient with it. But finally the time came and my buy limit orders went through. Phew. Now we’re waiting to see if this psychological level holds, and will help Bitcoin and the rest of the market to bottom out. The last times Bitcoin dropped to this level was in June and August 2018, and each time it was able to reverse back up to key resistance levels shortly after.
Bitcoin Tests Below Psychological Support Level in a Red Wave Attack
This time around, the upcoming moves may significantly depend on the Bitcoin Cash hard fork.
A Reminder About Bitcoin Cash's Hard Fork
On Thursday, November 15th, Bitcoin Cash (BCH) which is the child of a hard fork itself, is going to fork again. Forks normally result in upgrades in the network and it happens when two groups within the network disagree on the upgrades. This time, it looks like the Bitcoin Cash ecosystem is divided pretty dramatically. So this fork may result in multiple projects and coins. The dispute is between two competing factions, represented by their respective software implementations: Bitcoin ABC and nChain.
Fun fact: nChain chief scientist, Craig Steven Wright, claims to be the man behind the mysterious Satoshi Nakamoto. But he has only been able to produce falsified evidence for his claim.
With the community getting heated up, Coinbase is planning to monitor the event closely and potentially shut down Bitcoin Cash trading ahead of the hard fork in order to minimize customer disruption. The exchange had already announced that all payments and receipts of BCH in the Coinbase wallet would be paused on their platform, beginning 8 am on Thursday morning.
Don’t forget to complete your risk management due-diligence before developing your investment strategy.
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