Large Trading Opportunities Coming from the Bitcoin Cash Fork?

As the November 15th fork date approaches, tensions continue to rise between both factions of Bitcoin Cash. Some are beginning to worry about the radical behavior of Craig Wright. According to Coin Dance statistics, Craig Wright affiliated mining pools control 60% of the Bitcoin Cash network hash power. Wright is also claiming that he will destroy the Bitcoin Cash ABC network if it tries to fork off. Wright could do this by freezing all transactions on the BCH network with more than 51% of the hash power.

The two factions within BCH are known as Bitcoin Cash ABC and Bitcoin Cash SV (satoshi’s vision). ABC is in favor of the fork, and SV is opposed. Craig Wright is on the side of Bitcoin SV while Roger Ver and Jihan Wu are on the side of Bitcoin Cash ABC. Craig Wright is threatening the existence of Bitcoin Cash ABC, but can he really take over 60% of the network hash power? Jihan Wu is the founder of Bitmain, the largest cryptocurrency mining corporation in the world. Some are wondering if Bitmain could use their hashing power to combat Wright’s attempt to destroy Bitcoin Cash ABC. The outcome of this drama is yet to be seen.

Throughout the last two weeks, Bitcoin Cash experienced a parabolic upswing which has now been followed with a steep decline. As drama and anticipation for the fork increases, price activity is likely to remain volatile. Now that the price of Bitcoin Cash is looking to further decline, especially with Wright threatening the blockchain, Bitcoin Cash shorts are at an all time high.

If the fork comes and BCH shorts are still at all time highs, the price of Bitcoin Cash could fall off of a cliff. This is one scenario. Another likely outcome is that a manipulative whale could short squeeze the market and make a quick profit off of all of the levered shorts. There is no way to technically analyze the likelihood of this scenario because it would be clear manipulation. This situation has occurred many times throughout the cryptocurrency market, therefore it needs to be factored into the equation as a likely possibility. Furthermore, if the short squeeze occurs, it will likely be followed by the actual short. This decrease in price will be even more radical depending on whether or not Wright renders the BCH ABC blockchain unusable.

Immediately after the fork, there will likely be large price discrepancies across exchanges. The largest price discrepancies will be between the exchanges who will add support for the new forked coin, and those who will not. For example, Coinbase and Binance will support the new coin, while Bitmex will not support the new coin.

It is uncertain what will occur after the fork, nevertheless it will be undeniably interesting. When Bitcoin Cash originally forked from Bitcoin it was priced at around $8. Throughout the day it experienced a wild ride because the market had to decide on its value in real time. Within hours BCH increased to $1400 then returned to around $200. It was an incredible opportunity for traders and it will be interesting to see whether or not a similar event will occur.

Disclaimer: I am not a financial advisor. This is not financial advice. Please do your research independently and make objective decisions. This article is intended to educate readers on the recent state of the BCH fork. The author of the article owns cryptocurrency.