In the last five years, we’ve seen the cryptocurrency world go from niche status to dominating the news cycle. The main entry in the field is one, Bitcoin. Bitcoin has become the symbol of cryptocurrencies on the whole.
Despite that status, the community has seen repeated schisms. During that schism, the first proper Bitcoin split into Bitcoin and Bitcoin Cash.
Since then, Bitcoin Cash (BCH) has risen in prominence and anticipation. That being said, we want to explore what factors influence Bitcoin Cash price and how you can profit from it. Keep reading!
Supply and Demand
The market forces of supply and demand drive the BCH price. This refers to the total number of Bitcoins that are being exchanged for a certain amount of money.
When the demand for BCH rises, the price goes up. Conversely, when demand is low, the price goes down. Supply is ultimately limited by the total number of coins available, which is determined by algorithmic rules and economic incentives.
Market sentiment is a powerful driving force when it comes to Bitcoin Cash price and profit taking. Positive market sentiment occurs when investors have a favorable outlook on the future of cryptocurrency prices. This optimism can often drive an increase in price.
On the other hand, negative sentiment can lead to a decrease in cryptocurrency bitcoin price. Market sentiment is measured by analyzing news, social media posts, and sentiment analysis of crypto traders.
Factors such as development, regulations, and company announcements also can have an impact on bitcoin price and profits. Higher levels of activity and enthusiasm in the Bitcoin Cash community may lead to more positive sentiment and a price increase. If you can predict market sentiment correctly, it can provide an opportunity to gain profits or avoid losses.
Influence from Platforms, Exchanges, and Mining
Bitcoin Cash (BCH) prices are heavily influenced by the exchanges they are traded on, and the platforms used to facilitate cryptocurrency trading. Liquidity affects price discovery and order flow which can influence price fluctuations.
Exchanges such as VirgoCX, Kraken, Bittrex, and Coinbase are home to the most liquid BCH markets. Platforms like Bitpay, Coinbase, and Bitcoin.com play an important role in connecting buyers and sellers and providing liquidity to markets. They can also give insights on historical bitcoin prices.
Miners are also a critical component of any cryptocurrency system, as they help keep the network secure and facilitate transaction processing. They can also influence prices by mining more BCH than other miners in order to obtain control of the network, driving up the price of BCH.
For traders looking to capitalize on these forces, you can buy and hold BCH when prices are low. Selling them when prices are high can be a profitable strategy. Additionally, arbitrage opportunities may arise between different exchanges when different markets have different price levels.
Maximize Your Investments by Understanding Bitcoin Cash Prices
In conclusion, Bitcoin Cash prices are notably influenced by market supply and demand. This can be tracked to have an improved understanding of its price movement. By taking advantage of price swings and hedging with derivatives, users can capitalize on the current price of the bitcoin cash market.
Are you ready to start investing in Bitcoin Cash? Start now!
Check out the other articles on our blog to learn more.