NOIDA (CoinChapter.com) — Bitcoin Cash (BCH) successfully completed its second halving event on April 4, following which the token’s price soared more than 15% to form a daily high near $684.
However, bears quickly booked profits, forcing the token to pare gains and close the day near $666.
The token continued its rally on April 5, increasing BCH gains by nearly 8% to reach a daily high near $719
Bitcoin Cash Halving Impact
Halvings slash the reward for mining new blocks, theoretically enhancing a cryptocurrency’s scarcity and value. For Bitcoin Cash, the event reduced mining rewards from 6.25 to 3.125 BCH per block.
Since this is only the second BCH halving, there is not much historical evidence for comparison. However, since the ‘elder brother‘ Bitcoin price has nearly always rallied spectacularly following a halving event, traders expect BCH price to follow the pattern.
Leading up to the halving, BCH’s price showcased a remarkable rally, surging by 147.85% over the past three months. The uptrend suggested that traders expected the scarcity from rewards halving to help BCH price stage a bull run.
Bitcoin Cash experienced a slight hiccup before the halving. Miners switched to mining Bitcoin for better rewards just prior to the BCH halving, which resulted in sluggish block times for Bitcoin Cash.
However, the BCH market swiftly bounced back, suggesting traders remained bullish on the token’s prospects post-halving. As such, chances of Bitcoin Cash going on a bull run post-halving remain high, but so does the prospect of bears choosing to sell the news following the halving event.
BCH Price Spikes Post Halving, But Bears Book Profits
Bears booked profits after BCH price rose to its highest level since Nov. 2021 following its halving event. The sell-off pared most of the Bitcoin Cash token’s gains on April 4, indicating a ‘sell the news‘ sentiment among market participants.
If the bulls manage to continue the rally, BCH price could rally to the resistance near $731. Moreover, moving above the immediate resistance could attract more buyers, helping Bitcoin Cash price to the 0.786 FIB resistance near $824.
On the flip side, a continued downtrend would see the BCH price drop to the 20-day EMA (red wave) support near $590. Breaching the immediate support might force the crypto token to test the 0.236 FIB support near $503.
The relative strength index for BCH neared the overbought threshold, scoring 70.38 on the daily charts.
