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Bitcoin Cash Price Enters Recovery Mode After 4-Week Low

Bitcoin cash (BCH) is pushing higher against the greenback and could test the $1,200 mark soon, according to the technical charts.

As of writing, the world’s fourth-largest cryptocurrency by market capitalization is changing hands at $1,119 – up 3 percent on a 24-hour basis, according to data source CoinMarketCap. Prices had dropped to a four-week low of $938 on Friday, tracking the broader market sell-off.

However, over the weekend, BCH moved back above the $1,000 mark, signaling a temporary low is in place at $938.

Also, yesterday’s 14 percent rise in BCH was backed by a 38 percent jump in trading volumes, as per CoinMarketCap. A high volume recovery only adds credence to the argument that a short-term bottom has been made.

1-hour chart

The above chart (prices as per Bitfinex) shows:

  • BCH has created a bull flag, a bullish continuation pattern, meaning an upside break would signal the continuation of the rally from the Friday’s low of $914. BCH could then rise to $1,200 (psychological hurdle) and may extend gains to $1,240 – 161.8 percent Fibonacci extension.
  • Bullish crossover between the 50-hour MA (moving average) and 100-hour MA favors further upside in BCH prices.

That said, it is still too early to call a long-term bearish-to-bullish trend change as the cryptocurrency is still stuck inside a falling channel (series of lower highs and lower lows on the price chart).

Daily chart

The previous day’s bullish outside day candle adds credence to Friday’s bullish hammer candle and suggests BCH will likely see an upside break of the bull flag pattern (seen in 1-hour chart) and move towards the falling channel resistance of $1,200.

View

  • BCH looks set to test $1,200 over the next two-three days.
  • A daily close (as per UTC) above $1,200 would signal the sell-off from the record highs above $4,000 has ended and the bulls have regained control.
  • Meanwhile, a downside break of the bull flag would neutralize the immediate bullish outlook, while a daily close (as per UTC) below $914 (Friday’s low) could yield a sell-off to $758.61 (Feb. 6 low).

Balloons via Shutterstock

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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Cryptocurrency Continues To Develop At a Fast Rate. BitcoinCash Completes First Atomic Swap.

The first Bitcoin Cash atomic swap happened just yesterday according to a developer who provided proof for this on Github.com. The cryptocurrency can now be exchanged for other cryptocurrencies such as bitcoin with very little risk.

This transaction allows for hash time-locked contracts (HTLC’s). Atomic swaps are promises being made able by these contracts between two currency holders that an exchange will happen for the same value of currency at a given time. If the time limit expires, the contract would not be completed and the funds would be returned to both parties.

Although, due to the complexity of this some risk might rarely occur, in most instances there is a second level to complete the transaction that requires a private key, in which way the currency can be exchanged without anyone cheating.

To explain the transaction in its simplest form assume that Ron and Jane are swapping with each other. They have verbally agreed for Jane to swap her 10BCH with Ron’s 2BTC.  To create this transaction they use an application. Ron specifies a conditional swap where Jane would sign with a private key (hash) or they both would sign it. After that he creates a second transaction where he sends the amount to himself after 48 hours.

Jane does the same for BCH. Now all they need to do is provide the cryptographic proof of payment that can be generated at this stage. If the proof is not sent, or the agreement not signed, the funds will automatically return to the sender. The time limit is very important, however it is not very clear how the bitcoin network will be able to handle atomic swaps during times of high traffic and congestions between transactions.

Allowing decentralized exchanges between different cryptocurrencies, the feature will be helpful to many in the near future.


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