- Bitcoin cash price stayed above the $496 swing low and consolidated against the US Dollar.
- There was a break above a key bearish trend line with resistance at $510 on the hourly chart of the BCH/USD pair (data feed from Kraken).
- The pair struggled to move above the $530 resistance and the 100 hourly simple moving average.
Bitcoin cash price mostly consolidated near $500 against the US Dollar. BCH/USD must break the $530-540 resistance zone for a decent recovery.
Bitcoin Cash Price Analysis
Yesterday, there was another break below the $500 support in bitcoin cash price against the US Dollar. However, the BCH/USD pair found support near the last swing low at $496 and later recovered. It traded above the $505 and $510 resistance levels to start a recovery. The price climbed above the 50% Fib retracement level of the recent decline from the $562 high to $496 low.
Moreover, there was a break above a key bearish trend line with resistance at $510 on the hourly chart of the BCH/USD pair. However, the price struggled to break the $535-540 resistance zone and the 100 hourly simple moving average. Besides, the price was rejected near the 61.8% Fib retracement level of the recent decline from the $562 high to $496 low. As a result, the price retreated and traded below the $520 level. At the outset, the price seems to be consolidating above the $500 level. Buyers must clear the $530, $535 and $540 resistance levels to start a decent rebound.
Looking at the chart, BCH price may continue to stay above the $500 support area. Having said that, if buyers continue to fail near the $535 level, the price may perhaps break the $500 and $495 support levels.
Looking at the technical indicators:
Hourly MACD – The MACD for BCH/USD is still placed in the bearish zone.
Hourly RSI (Relative Strength Index) – The RSI for BCH/USD is currently near the 50 levels.
Major Support Level – $500
Major Resistance Level – $535
Bitcoin Cash Steadies
Bitcoin Cash fell by just 0.04% on Tuesday, following a 2.78% slide on Monday, to end the day at $520.4, with Bitcoin Cash down in 6 of the last 7 days.
A particularly choppy day saw Bitcoin Cash fall to an early morning intraday low $508.5, holding above the day’s first major support level at $502.2 before a mid-morning rally kicked in, driving Bitcoin Cash through the day’s first major resistance level at $541.5 to an intraday high $557.5.
Unable to hold on, a late pullback saw Bitcoin Cash fall back to $520 levels by the day’s end, the volatility coming off the back of market sentiment towards tomorrow’s hard fork.
At the time of writing, Bitcoin Cash was up 1.93% to $530.5, with Bitcoin Cash moving from a start of a day morning low $518.8 to a morning high $531.3, the morning moves leaving the day’s major support and resistance levels untested.
For the day ahead, a hold onto $530 levels through the morning would support a run at $540 levels to bring the day’s first major resistance level at $549.1 into play, though for Bitcoin Cash to continue in its recovery mode, Bitcoin Cash hard fork chatter will need to be favourable, any talk of disruption to Bitcoin Cash likely to weigh heavily.
Failure to hold onto $530 levels through the morning could see Bitcoin Cash slide through the morning low $518.8 to sub-$510 levels, with the day’s first major support level at $500.1 in play should a sell-off kick in in later in the day.
Litecoin Back in the $40s
Litecoin slid by 2.94% on Tuesday, following a 0.93% fall on Monday, to end the day at $48.84, Litecoin’s first sub-$50 day’s end since the end of October.
Bearish through the day, Litecoin fell from an early morning intraday high $50.43 to a late in the day intraday low $48.31, the reversal seeing Litecoin fall through the first major support level at $49.77 and second major support level at $49.22 before finding support, though not enough to break back through the support levels by the day’s end.
At the time of writing, Litecoin was up 0.8% to $49.23, moves through the early morning seeing Litecoin rise from a start of a day morning low $48.78 to a morning high $49.25, the day’s major support and resistance levels left untested early on.
For the day ahead, a hold onto $49 levels through the morning would support a run at $50 levels and the day’s first major resistance level at $50.08, while we can expect plenty of resistance on the way through to $50 levels to pin Litecoin back from a run at $51 levels on the day.
Failure to hold onto $49 levels through the morning could see Litecoin give up the early gains, with a slide through the morning low $48.78 likely to bring sub-$48 levels and the day’s first major support level at $47.96 into play before any recovery.
Ripple Sees Red
Ripple’s XRP fell by 1.26% on Tuesday, partially reversing Monday’s 2.77% gain, to end the day at $0.51738.
A bullish start to the day saw Ripple’s XRP move through to a late morning intraday high $0.53429, falling just shy of the first major resistance level at $0.5378 before hitting reverse.
The 2nd half of a day reversal saw Ripple’s XRP fall to an intraday low $0.51147 before steadying, with Ripple’s XRP holding above the day’s first major support level at $0.5077.
At the time of writing, Ripple’s XRP was down 0.16% to $0.51654, with a bearish start to the day seeing Ripple’s XRP fall to a morning low $0.51252 before finding support to move through to a morning high $0.52, the day’s major support and resistance levels left untested early on.
For the day ahead, a move back through to $0.52 levels and hold through to the early afternoon would support a run at $0.53 levels and the day’s first major resistance level at $0.5306, while we would expect Ripple’s XRP to fall short of $0.54 levels on the day, with Ripple’s XRP needing to hold onto $0.53 levels by the day’s end to support a bullish move through the 2nd half of the week.
Failure to move back through to $0.52 levels could see Ripple’s XRP pullback through the morning low $0.51252 to $0.50 levels, with the day’s first major support level at $0.5078 very much in play in the event of a reversal, sub-$0.50 support levels unlikely to be tested barring particularly negative news hitting the wires.
Bitcoin Cash continues to hover around the Fib retracement levels while traders await the outcome of the hard fork. By the looks of it, there is still no consensus in the community as a near 50-50 split on the versions is eyed.
On the 4-hour time frame, the 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. After all, Bitcoin Cash recently formed a double bottom reversal pattern and was able to break above the neckline.
Besides, the 100 SMA also seems to be holding as dynamic support around the 61.8% Fib and $500 handle. A larger dip could test the 200 SMA dynamic inflection point, but a break below this could mean a move back to the swing low or lower.
Stochastic appears ready to climb after dipping into the oversold region, but there are signs of hesitation as well. RSI is turning higher even without hitting the oversold territory, suggesting that buyers are eager to return. In that case, Bitcoin Cash could recover to the swing high around $650.
Market analysts seem to be projecting a larger probability of a selloff following the hard fork than a strong bounce. Based on data Bitfinex, there are currently 89,457 open BCH short positions and 53,322 open longs. The expected outcome is that BCH will split into two cryptocurrencies: Bitcoin ABC and Bitcoin SV.
Some say that the recent bounce took place merely due to traders taking advantage of “free coins” that could be a potential result, but others believe that a “post-fork” drop is a more likely outcome. Still, the large amount of short orders suggests that a short squeeze might also be possible.
A new statement by the founder of Cointext, Vin Armani, shocked the crypto community quite a bit. According to him, Craig Wright and Calvin Ayre are making plans to take over Bitcoin Cash (BCH) by using a 51% attack. After doing so, their supposed plan is to do the same on other cryptocurrencies.
According to Armani, who has been a BCH and BTC supporter for quite some time now, the plan to use 51% attack should not be taken as a bluff.
In his statement, he pointed out that November 15th is the date when BCH will have a hard fork, and Bitcoin SV (BSV) is expected to split off of it. Transactions will be valid on both of these networks, which is something that several large exchanges have already confirmed.
The attack strategy
Immediately after the split, Coingeek and nChain are supposedly planning to launch a sustained 51% attack by using mining rigs for mining the opposing chain. While they will likely be mining empty blocks, they will be able to get a hold of the majority of the network and take control over it.
Armani further expressed his belief that Wright might even have additional attacks planned, some of which may have never been even considered before. As a result of the attack, Bitcoin ABC is expected to end up in a state of disarray, which will cause exchanges and apps to lose confidence in the BCH network. That way, their only choice would be to go for BSV nodes.
nChain’s and Coingeek’s allies will allegedly also start a transaction spam attack, which will additionally magnify the confusion on November 17th. Millions of small transactions will appear thanks to a tool called “Satoshi’s shotgun”, which was created for a purpose such as this.
Big exchanges like Coinbase already announced that deposits and withdrawals will be disabled due to the fork. Thanks to the chaos caused by the attack, they will be unable to return them until BCH network stabilizes. This is exactly why Coingeek and nChain plan to keep the network unstable, which will cause investors to get rid of their BCH, according to Armani.
Furthermore, Armani claims that nChain and Coingeek do not mind suffering a reduction of their own wealth, in order to achieve their goal. In the end, if the attackers are successful, they will be in charge of Bitcoin Cash and its future development. All of the coins that get mined during the attack will belong to them, and this success will show that an offense attack can work against the Bitcoin network.
After this, Armani believes that that the attackers will continue to attack PoW blockchains. Coingeek already has a deal for obtaining Samsung-made ASICS mining chips, and as soon as they gather enough power and mining gear, they will likely go after other sha256 networks, especially Factom and Namecoin. Their first goal will be to absorb fractured parts of BCH community and then to move on to targets such as Dash, Litecoin, and Zcash.
Finally, their ultimate goal will be Bitcoin network itself, which they will bring down after gaining enough power and absorbing the leftovers of other networks.
Is the attack a real threat?
Cryptonize’s Ari Kuqi recently launched Sharkpool which claims that all altcoins, including forks, are nothing more than acts of war against Bitcoin. This is why Sharkpool miner will mine all empty blocks on altcoin networks, and sell all the profits for obtaining Bitcoin. By Bitcoin, it is believed that they mean Bitcoin Cash and Bitcoin SV. In a way, the plan is to destroy every altcoin-owned PoW blockchain out there.
The plan of attack that Armani has described is likely correct. However, it still remains to be seen whether or not it will actually work as planned. Defending Ethereum would likely be pretty simple. However, BCH chains that will appear on November 15th have no real protection as far as anyone can tell right now.
While it is unclear what kind of test November 17th will bring, it is expected that exchanges and businesses will likely delist BSV as soon as it starts looking like a threat. in addition, if Bitcoin Cash miners do not repel the 51% attack, it is likely that PoW will have to be changed.
While the plan that Vin Armani described can work in theory, it is still deemed unlikely that it will work that well in practice. Experts do not even believe that attackers can overpower supporting miners, to begin with.
Instead of a serious attack that will damage the space, most believe that the next few days will likely only bring another crypto show. Still, the event is only two days away now, and it would probably be wise for supporting miners to be prepared for this scenario as well, just in case.