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BTCUSD: price forming a wedge

Cryptocurrency miners, investors and speculators are all awaiting the 1st of August. On this day, there is a high chance, due to disagreements about scaling within the community, of a user-activated hard fork occurring, which would create a new digital currency called Bitcoin Cash.

Bitcoin Cash (BCC) tokens will be given to users in direct proportion to the amount of bitcoins they own; i.e. at a ratio of 1:1. If you have 1 BTC, you’ll receive 1 BCC. If the exchange you trade on doesn’t support Bitcoin Cash, you won’t receive any.

Upon receiving these new tokens, traders will be able to sell them on exchanges that have consented to supporting the new currency. These include Bihumb, Bittrex, Korbit, Kraken, Livecoin, Okex, ViaBTC and Bitfinex. BTCC, CEX.io, and Huobi have taken a wait-and-see attitude, and have thus far refused to commit to supporting BCC.

1 BCC is currently valued at 324 USD. Some small Chinese exchanges trading BCC futures in yuan are giving quotes of around 300 USD (0.115 BTC).

Two similar names; Bitcoin and Bitcoin cash, will create some confusion among novices. Fraudster’s may start selling “discount bitcoins”, giving out BCC instead of BTC.

Technical factors: On the hourly timeframe, the BTCUSD rate is consolidating at 2,716 USD around the balance line (simple moving average with a period of 55). A resistance has formed at 2,760 – 2,767 USD and there’s a support at 2,660 USD. If Bitcoin Cash posed a genuine threat to Bitcoin, the BTCUSD pair wouldn’t be trading at 2,731 USD now, but around 1,800 USD. So, everyone who wants to support Bitcoin Cash, are now buying Bitcoin, keeping it up at 2,730 USD.

There’s a wedge formation starting to appear on the 4-hour timeframe. Considering that the splitting of the bitcoin is more of a fundamental factor, I’m going to avoid making a prediction. Technical analysis doesn’t work at times like these.

BTCUSD 4-hour timeframe on the Bitfinex exchange. Source: TradingView


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