Bitcoin bulls may be alarmed by BCH's 15% post-halving drop. Bitcoin currency is considered as a proxy for the imminent blockchain reward halving. The Bitcoin blockchain will halve incentives on April 20.
In eight days, Bitcoin's fourth mining reward halving will reduce supply growth by 50%. This every-four-year event has predicted multi-month bull runs. In anticipation of the critical event, bitcoin cash {{BCH}} is warning traders to reconsider their expectations for a post-halving price increase.
One day after its parent network reduced each block coin issuance to 3.125 BCH on April 4, BCH, a cryptocurrency launched in 2017 from the hard fork of the Bitcoin blockchain, ran out of steam over $715. Since then, BCH has fallen 15% to $604,
the notional open interest in BCH perpetual futures has dropped 70% to $376 million in seven days. Bullish bets were unwinding early this week as major exchanges' annualized perpetual financing rates went negative. Negative financing rates discount perpetuals to the asset's spot price.
Wintermute, an algorithmic trading firm, says BCH is a proxy for BTC's approaching halving, which could cause selling pressure after April 20. Wintermute wrote in a weekly newsletter shared with CoinDesk, "Over the last month, fast money has been noticed in BCH - presumably trading the currency as a proxy for the forthcoming Bitcoin halving; an interesting move in funding rates since perps now trade under spot
Several analysts have warned that BTC has priced in the coming supply expansion slowdown and could "sell the news" after the halving. After the halving euphoria dies down, JPMorgan expects a sell-off to $42,000.
Bitcoin traded at $70,700 at press time, up 67% year-to-date, according to CoinDesk. Prices reached historic highs exceeding $73,000 before halving, surpassing the 2021 peak. Historically, highs came months after halving.
post-halving miner sales may make it harder for bulls to push prices higher this summer. According to our estimations, miners may sell $5 billion in BTC following the halving. As in the past, bitcoin may trade sideways for four to six months due to this selling overhang "10X Research founder Markus Thielen stated.
Bitcoin miners solve complex mathematical problems to verify transactions and add new blocks to the network for BTC credits. The impending halving will cut their per-block reward by 50%.
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