The price of Bitcoin Cash (BCH) has risen by nearly 20% in the last week: indeed, some positive predictions are circulating regarding the May fork.
Bitcoin Cash (BCH) price increase and future predictions
Bitcoin Cash is one of those long-standing cryptocurrencies that failed to make new all-time highs during the last big bull run. In fact, $3,785 of December 2017 is still the highest price, and compared to the current price it is almost 97% lower.
In 2021, the peak price touched by BCH was just over $1,500, or less than half of the 2017 record.
Compared with the 2021 peak, the current price of about $120 is 92% lower, so the current level is definitely very low.
But the lowest point touched last year was actually below $90, in November 2022, so it has already recovered 36% since then.
Specifically, starting from $96 on 2 January 2023, the price of BCH rose first above $100 on 5 January, and then to $108 on 10 January. Starting on 12 January it jumped first above $110 and then also above $120, with an annual peak at $130 on 14 January.
Certainly this trend has followed that of Bitcoin (BTC) and the crypto markets in general, but there may be more going on underneath.
The hard fork
A protocol update via hard fork is planned for May this year.
– Charts look insanely bottomed and ready for impulse
– Most BCH whales (Ver, Jihan) either capitulated or inactive
– Biggest network upgrade/hardfork in years in May 2023 (more efficient smart contracts, L2 capabilities)https://t.co/sqb2gtE1tS pic.twitter.com/ESaslrDfHv— Andrew Kang (@Rewkang) January 12, 2023
This is a rather important update for Bitcoin Cash, because it would introduce on-chain so-called CashTokens and the ability to create decentralized applications. This would make the Bitcoin Cash protocol look a little more like Ethereum, and a little less like Bitcoin.
The Bitcoin Cash network is updated every year on 15 May, thanks to an informal agreement between the various development teams.
In 2022 the update happened precisely as the crypto markets collapsed due to the implosion of the Terra/Luna ecosystem, while in 2021 it happened as they retraced due to the Chinese ban.
So in the last two years the mid-May update failed to have significant impacts on price.
In 2020 it occurred shortly after the recovery from the March financial market crash due to the onset of the pandemic, so again it did not have significant impacts on the price of BCH.
In contrast, in 2019 the price of BCH as early as April doubled from $150 to $300, and then rose again above $480 in June thanks to the small bull run in crypto markets due to the announcement of Facebook’s Libra project.
The thing is, crypto markets follow Bitcoin’s four-year cycle, so 2023 is definitely more like 2019 than any other year.
Bitcoin Cash’s price predictions
In light of this, some predictions have begun to circulate that before the update on 15 May, the price of BCH could rise.
As the current price is a long way from the 2021 peak, the potential for growth is there, as long as the 2023 trend is similar to that of 2019.
The fact that in 2019 the price began to rise as early as late March reveals that the markets are aware of these dynamics, and try to anticipate them.
However, the current price is in line with that of November 2022 prior to the FTX bankruptcy, which is exactly like that of BTC, so the rise in recent days would seem to be specifically due to the general trend in crypto markets.
It turns out to be rather curious though, that the small bull run triggered in March 2019 started from a BCH price of $128, which is very similar to the current $123.
It also turns out to be equally curious that in April 2019 the price rose to $320, which is a figure very close to that of May 2022 before the collapse caused by Terra/Luna.
It almost seems that $100 is the low end of the BCH price, even though the all-time low is $77, and that $120 is the level from which bull runs originate. These often reach all the way above $300, only to explode further in the event of a speculative bubble.
So in the event of a repeat of something similar to 2019, it is to be expected that the price of BCH could also reach above $300 during 2023. However, there is no certainty that this will happen.
The bull trap
In addition to these optimistic forecasts though, there are also many pessimistic assumptions circulating that the current one may just be a bull trap.
That is, in these first two weeks of 2023, the prices of several cryptocurrencies seem to have risen too much, and too fast.
For example Solana’s SOL went up 135%, which at this time seems abnormal even for very volatile markets like crypto.
In addition, Bitcoin’s price seems to be unable at this time to far exceed $21,000 and head even higher.
All of this leads to a lot of speculation that there may be a retracement soon, even one that may not necessarily bring prices back to the lows of 2022.
For example, until 11 January, the price of Bitcoin had only risen as high as $17,000, and only since 12 January did the run begin that brought it back close to $21,000 in two days.
It is therefore necessary to analyze the recent increases very cautiously, because they may also end up being unsound.
However, at least for Bitcoin Cash there is still time before a bull run could possibly be triggered pending the update on 15 May.