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Bitcoin Cash Halving an Insight For BTC? BCH Price & Open Interest Down After Event

Last Updated April 12, 2024 2:52 PM
James Morales
Last Updated April 12, 2024 2:52 PM

Key Takeaways

  • The Bitcoin Cash halving occurred on April 3.
  • Over a week later, the price of BCH has failed to take off, while open interest in the cryptocurrency has declined.
  • The Bitcoin halving is expected to take place on April 20.
  • In 2020, BTC roughly followed the post-halving pattern established by BCH.

More than a week after the Bitcoin Cash halving, the price of BCH has barely budged, having fallen back down from a 10% spike in the 24 hours immediately after the event.

Coinalyze data  shows that open interest in the cryptocurrency has also dropped from a high of $665 million on April 5 to just $340 million a week later.

Often seen as a proxy for Bitcoin, BCH’s disappointing post-halving performance could foreshadow a similar downturn for BTC later this month. 

BCH vs. BTC: Comparing Halvings

Since Bitcoin Cash forked from Bitcoin in 2017, the two produced blocks at different rates, resulting in a growing gap between the dates at which rewards for each one are reduced by half.

Due to small differences in block rate that add up over time, Bitcoin Cash printed block number 840,000 on April 3, while the main Bitcoin chain is on course to reach the same milestone on April 20.

After the first Bitcoin Cash halving in 2020, the price of BCH fell by around 12% in the following week, from $252 to $222. 

When Bitcoin underwent its own halving four weeks later, the pullback was even more stark, with the price of BTC retracing by as much as 17% in 7 days.

Bitcoin Cash Derivatives Activity Declines

From March 20, open interest in BCH derivatives climbed near-continuously until it reached $887 million on April 5, 2 days after its halving. But the figure has since retreated. 

Bitcoin cash open interest
Source: Coinalyze.

Meanwhile, Bitcoin’s open interest hit a local peak of $36.22 billion on April 1. While it has dropped back down since, there is still time for the BTC derivatives market to heat up between now and the upcoming halving next week. 

If it follows the pattern of BCH, however, the days that follow will see BTC open interest decline.

Low Open Interest Points to Flat Trading Ahead

As a general rule, decreased open interest correlates with low price volatility. 

Following the halvings of 2020, the price of Bitcoin didn’t start to rise again until October. Meanwhile, Bitcoin Cash remained flat until December.

After all previous Bitcoin halvings, the cryptocurrency has made its most significant gains after an initial period of trading sideways (from a long-term perspective at least). 

Halvings are widely recognized as catalysts for price growth, which is the logical result of the change in BTC supply. That being said, the timing of each bull run has differed, and there is no way to predict when the post-halving surge will come.


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