Bitcoin Cash (BCH) experienced a temporary drop in its three-month-long rally on Wednesday as its blockchain underwent its second halving event, resulting in a reduction of mining rewards. Bitcoin Cash is a cryptocurrency and blockchain network that was created to offer faster and cheaper transactions compared to Bitcoin (BTC). The first halving event for Bitcoin Cash occurred on April 8, 2020, which reduced miner rewards from 12.5 BCH to 6.25 BCH.
In anticipation of the halving, the price of Bitcoin Cash had seen a significant increase of 147.85% over the past three months and 24% over the past 30 days. However, just before the halving, the price dipped by 9.94% to $572.21. Nonetheless, the price quickly bounced back after the halving and reached $604, representing a spike of approximately 5.5%.
The price decline resulted in liquidations totaling $3.9 million, primarily affecting long positions amounting to $3.3 million, while short positions accounted for $569,540, according to CoinGlass data.
Bitcoin Cash long positions worth $3.3 million were liquidated following the price dip. Source: CoinGlass
On March 29, Cointelegraph reported that the open interest (OI) in Bitcoin Cash futures perpetual contracts had reached an all-time high of $708.75 million. Since then, the OI has continued to rise and has now reached $799.23 million.
In the lead-up to the halving, many miners had already switched to mining Bitcoin, as explained by a user named “DavidShares” to his 17,500 followers. He also noted a decline in hash rates since the halving. As per Bitcoin Unlimited data, the network has validated a total of 840,004 blocks, with only four blocks being validated since the halving event.
Source: DavidShares
Bitcoin Cash forked off from Bitcoin in 2017 due to disagreements within the community regarding scaling and transaction fees. Two years later, it split again, leading to controversy among miners who had not upgraded to the new chain, resulting in wasted resources. In November 2019, it was reported that miners had mined 14 empty blocks on the old chain, which was considered invalid and rejected by the majority of the Bitcoin Cash network.
Meanwhile, the highly anticipated Bitcoin halving is scheduled to take place on April 20, just 16 days from now.
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