Bitcoin Cash (BCH), a cryptocurrency created through a hard fork of the Bitcoin (BTC) network in August of last year, has been rising at an impressive pace in the last few days, and is currently up over 85% in the last two weeks.
According to CryptoCompare data, BCH went from a $74 low to nearly $230 in only a few days, and has since seen its price drop back down to $196, where it’s trading at press time. The cryptocurrency has notably dropped about 98% from its all-time high of $4,000 before this recent rally.
What’s behind BCH’s recent recovery is currently unclear. The cryptocurrency fell along with the rest of the market but is currently outperforming the rest of the market. Earlier this year BCH went through a hard fork that led to the creation of Bitcoin Cash Satoshi’s Vision (BSV), and a ‘hash war’ that some analysts believe has taken its toll on the cryptocurrency ecosystem.
The rise also comes at a time in which the equities market has been seeing repeated sell-offs. Since the beginning of the month the S&P 500 Index has lost over 11% of its value over rising interest rates and the threat of slower global growth. Some crypto enthusiasts believe cryptocurrencies can be used to hedge against wider market failures, and as such the crypto’s value may be growing.
Still, some claim that BCH’s rise appears to be a dead cat bounce, meaning it’s merely a temporary recovery that’s set to be followed by the downtrend’s continuation. In a Bloomberg op-ed article Lionel Laurent argued the cryptocurrency – along with BTC - may not recover from this year’s bear market.
The slight bounce after a catastrophic year is probably to be expected, but may not be sustainable. One still can’t rule out that these particular crypto-cats are dead.
Peter Brandt, an ‘old school’ trader who called bitcoin’s 84% decline this year, warned the cryptocurrency’s recent rally to little over $4,000 could be a dead cat bounce, in which case its next target would be the $1,200 mark.
Some have also claimed Bitmain, which is said to own one million BCH, is artificially pumping the cryptocurrency’s price to look more appealing to investors. This, after sources recently claimed the Hong Kong Stock Exchange was unlikely to approve its initial public offering (IPO).