Bitcoin Cash Is up 84% in Two Weeks in What Some Claim to Be a Dead Cat Bounce

Francisco Memoria

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.

Bitcoin cash's price in the last month

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).

Little-Known Cryptocurrency Pumps 500x in Four Days. Are Altcoins Back?

Colin Muller

Micro-cap altcoin Opyn yCurve Insurance (OCRV) saw a monstrous surge last week, evoking reminders from bygone eras of the cryptoasset industry.

chart.pngSource: Livecoinwatch

Between May 19 and May 23, cryptocurrency price trackers registered a price jump from $0.0055 to $2.84—or about 500x—on OCRV. The cryptocurrency appears to only be trading on the decentralized exchange Uniswap.

The unreal price fluctuation seems to have been caused by “shilling” of the coin on 4chan. OCRV itself is a token powering the Opyn platform’s DeFi insurance system.

Altcoins Return?

Such dramatic events in the altcoin space may be signalling strength in the alt market. Generally speaking, high levels of investment in altcoins signals increased risk-taking in the crypto markets, and is a sign of confidence.

rising altcoins -- still?BTC chart by TradingView

We have seen a general increase in altcoin market share since about September 2019, depicted above. This trend took a big hit in February and March of 2020, as the coronavirus spread around the globe and hit financial markets—including crypto markets.

In a general sense, the trend seems to have remained intact, consistently rising from 5 to 8% in the six months depicted. The flip side is Bitcoin's dominance, which if rising signals a reluctance for risk taking (and often a falling Bitcoin price). This had been consistently ebbing since last September, but now seems stuck in the mid-60s.

In a decimated global economy, nobody quite knows what to expect from the cryptoasset industry. With some hints of altcoin strength, though, the prospects remain interesting.

Featured Image Credit: Photo via Pixabay.com