BCH and BSV production cuts are imminent, beware of the risk of a fall after a high

BCH and BSV, which were the talk of the town before the New Year, are about to usher in their most important day - halving. Since ETC is too small in size and its output is not halved but only reduced by a small part, it will not have a big impact on the overall cryptocurrency market. Therefore, before the New Year, BCH and BSV are the currencies that everyone has the highest hopes for before BTC halving.

In fact, the overall upward movement of mainstream currencies before the New Year, including the initial rise of BTC, was closely related to the overall strong performance of BCH and BSV. However, since the overall cryptocurrency fell from its highs, people have paid less attention to these non-BTC mainstream currencies. There is even little news about BCH and BSV in the market for about three days. Will BTC, which will be halved in 37 days, also be ignored by the market?

A big reason is the impact of the current environment. After this wave of decline, everyone knows that Bitcoin is still the pillar of the current currency circle, and no other currency can come close, especially in terms of investors' capital preferences. Bitcoin's performance is still like this under the influence of the overall environment, and other currencies will find it difficult to make a big wave no matter how good the news is.

The situation of Bitcoin, which will be halved in 37 days, will be different, because the production reduction of BCH and BSV is only a change in output, and the empowerment behind it has little impact on the entire currency circle. However, this is not the case with BTC halving, and the significance of halving is also different for these two varieties.

First of all, the market has more expectations for BTC. Unlike BCH and BSV, these two currencies are experiencing their first halving, and the situation after the halving is unknown. The trend of BTC in the past two halvings is obvious to all. Although the rise of BTC in the first two times was only consistent with the halving time, it was not necessarily entirely due to the power of halving, but due to the coincidence on the timeline, the idea of ​​halving = rise has been deeply rooted in the minds of most investors. By then, no matter the market reaction or market performance, it will not be comparable to the current BCH and BSV.

In addition to changes in output, the biggest impact is also on the derivative industries it has spawned - the mining industry and miners. This is not to say that there are no miners in BCH and BSV, but that the focus of the entire mining industry is still on BTC.

By then, with the reduction in BTC production, a reshuffle in the mining industry is inevitable, especially it is only a matter of time before some smaller mines and mining machines with lower computing power are eliminated. As we all know, when the price of Bitcoin is too low, the old mining machines with low computing power are the first to be shut down, and when the output is halved, the output efficiency is even lower than that of the latest high-efficiency mining machines, which will bring about a chain reaction.

When some miners and mining farms realize that their mining machines can no longer keep up with the new machines, whether they want to upgrade their mining machines or exit the mining circle, it is inevitable that they will sell and cash out the BTC they have stored. At that time, we also need to worry about whether there will be a wave of cryptocurrency selling at the miner level.

Back to the market, with the rebound in the morning, BTC is now hitting 7,000 US dollars again. From a technical point of view, MACD is about to form a golden cross, and the volume performance is acceptable. It is reasonable to make a wave with the strong aftermath of last week.

The current problem is how high this wave can go, whether it can hold steady at $7,000, and whether the subsequent volume can support it. Otherwise, rising too early is not a good thing, because this week's weekly line started with a bare-footed positive line. If the subsequent gains are not large and stable, there is still a lot of time left this week and there is a lot of room for a rise and fall.

So now the market has started to rise, and if it continues to rise fast enough, urgently enough and by a large enough magnitude, it will be able to hold steady at 7,000 even if it falls back. Otherwise, it will not be able to hold steady after a brief surge to 7,000.

Another important point is the current long-short ratio. The current short ratio shows a clear gap with the long ratio. Under normal circumstances, it means that the bullish atmosphere is stronger, but in the currency circle, there are often malicious harvesting incidents by the dealer, so whether the dealer will choose to pull the market to explode the short contract and then fall is also the key we need to consider. In short, the current strategy is that there is a chance to rise, but the risk and probability of falling back after the rise is greater.