Since the first of November, Bitcoin Cash has seen a 45% rally as Binance and Coinbase, two leading digital currency exchanges, announced their support to their upcoming Bitcoin Cash fork due on the 15th November.
On its website, Coinbase announced that ‘in the unlikely event that several viable chains continue following the fork, Coinbase will make sure that customers will have access to their funds on each chain.
As a hard fork occurs, holders of the forked digital currency are eligible to get both coins. But if the crypto holdings are deposited on an exchange then the exchange will have to adopt both protocols to let users migrate both coins.
For those of you that don’t know:
“A hard fork is a technology update. It doesn’t necessarily mean that a new coin will be created. But because the upgrade is irreversible, the majority of miners should agree to migrate to the new protocol for the chain to remain intact. If however, this is not the case, then the hard fork could result in two separate coins.”
As said by FX Street:
“Holders could, of course, manage their cryptocurrency holdings independently from an exchange, by keeping them on a separate wallet and make sure that they could claim both coins after a hard fork.”
However, the biggest cryptocurrency exchanges support is a key step for facilitating adoption for a new coin by investors and removes a part of the restrictions and worries that surround the hard fork.
Even so, with this in mind, the event risk is still prominent before the Bitcoin Cash’s November fork.
If we look forward, the continuous uncertainties and the increased price volatility could weigh on Bitcoin Cash / USDT, which has increased too and above the 600 region which encourages a downside correction toward the major 38.2% retracement on the rally during November. This level should be able to tell the difference between the development of a stronger positive trend and a short-term bearish consolidation.
So what’s so important about the fork in November?
Bitcoin cash has been under some selling pressure over the past few months, nothing too serious but decent. A part of the price unwind was because of the negative momentum throughout the industry, however, another factor was thanks to the controversies regarding the digital currencies planned hard fork in November.
It’s worth noting that Bitcoin Cash forks two times a year in order to protocol updates. The idea of this is to improve the speed, scalability and issues regarding security.
What are your thoughts? Let us know down below!
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