The fourth Bitcoin (BTC) halving is just nine days away. However, another halving that occurred at the beginning of the month could bring signals for BTC traders. This halving is that of Bitcoin Cash (BCH), which took place on April 2nd.
This is because BCH’s post-halving behavior may cause traders to change expectations for an immediate BTC price increase after the halving. Even with different networks, alerts can be used for BTC as well.
BCH loses strength after halving
Created in 2017, BCH has a cycle similar to that of BTC, with a halving in the issuance of new coins after 210 thousand blocks mined. In the case of BCH, the halving occurred a little earlier than BTC, but the block reward dropped from 6.25 BCH to 3.125 BCH – just as will happen with BTC.
Initially, the price of BCH was worth around US$630 before the halving and rose above US$700 in the days following the halving. However, BCH lost strength when it reached US$715 and began to correct. Since then, the cryptocurrency’s price has dropped 15%, reaching its current $604, according to CoinGecko.
Notional open interest, the dollar value locked in the number of active perpetual futures linked to BCH, plummeted 70% to $376 million. Meanwhile, annualized perpetual funding rates on major exchanges turned negative earlier this week.
Negative funding rates mean trading at a discount to the asset’s spot price. In other words, they are investors betting on further price drops.
Lesson for Bitcoin
According to Wintermute, BCH can serve as a benchmark for BTC in this regard. Wintermute believes that BTC may also face downward pressure after April 22, the scheduled halving date.
“In the last month, fast money has been seen in BCH – potentially trading the coin as a proxy for the Bitcoin halving. An interesting move in funding rates as criminals currently trade in cash,” Wintermute said in a weekly newsletter.
Several analysts have warned that the market is already rectifying the BTC halving in terms of appreciation. Therefore, the saying “rises in rumor, falls in fact” can occur, with the price correcting after confirmation of the halving.
American bank JP Morgan predicts this moment, estimating that BTC could fall to US$42,000 after the halving. This would represent a loss of almost 40% compared to the current price.
According to 10X Research, miner sales after the halving could contribute to the drop, preventing traders from causing short-term appreciation in BTC.
“Based on our calculations, miners will potentially liquidate $5 billion worth of BTC after the halving. The balance of this sale could last four to six months, explaining why Bitcoin could be sidelined in the coming months – as it has in the past,” said Markus Thielen, founder of 10X Research.
Source: https://www.criptofacil.com/halving-do-bitcoin-cash-pode-trazer-alertas-a-traders-de-bitcoin/
