Bitcoin Cash Rally Comes to an Abrupt Halt: What’s next?
1) The Koreans, at one point responsible for nearly $1bn in daily trading volume in Bitcoin Cash (BCH), have stopped buying BCH. While still actively traded, the volume has dropped to just $115m.
2) Some aggressive traders shorted BCH futures a week ago, only to be run over by those Korean retail buyers and forced liquidations caused spot prices to rally even more. Trading volumes exploded.
3) Many OG holders of BCH have shorted futures against long positions, pocketing some 80-100% annualized yields that were up for grabs for a few days. Contrary to speculative short-term traders, those traders have 'staying power' as they are long through 'natural longs'.
4) Now, the perp discount has closed and with declining volume, the trade is over.
5) Bitcoin Cash (BCH) has outperformed Bitcoin (BTC) by +150% since June 21. BCH will likely now underperform BTC. An excellent, risk/reward-relative value trade can be implemented as BCH perps have closed the discount. Sell BCH perp vs. buy BTC spot is the trade.
6) As a reminder, BCH started to ramp up when the EDX Markets, a new crypto exchange backed by major Wall Street players such as Charles Schwab, Citadel Securities and Fidelity Digital Assets, launched on June 21.
7) Most people have known about the exchange since last September but after the recent SEC lawsuits with Binance and Coinbase, the market jumped on this news.
8) Bitcoin Cash (BCH) is a digital cryptocurrency that emerged as a result of a hard fork from the original Bitcoin (BTC) network in August 2017. It was created to address certain perceived limitations of Bitcoin, particularly regarding scalability and transaction speed.
9) One notable distinction is its larger block size limit, allowing for more transactions to be processed in each block. This change was intended to enhance transaction capacity and reduce fees, making Bitcoin Cash more suitable for everyday transactions.
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