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Spotlight on Bitcoin Cash Hard-fork Policy and Its Impact on BCHZ18 Futures Contracts

Although BCHUSD is showing minor rallies (up about 2.03% for the day), the buying sentiments are not convincing as these rallies are not backed by the momentum and trend indicators (refer daily chart). Moreover, bears of this pair resume on the failure swings at the stiff resistance, while the current prices still remain below 7DMAs, both leading oscillators in tandem with downtrend.

BitMex sheds some light on bitcoin cash as this cryptocurrency is expected to conduct a hard-fork upgrade on 15 November 2018. There are predominantly two competing incompatible hard-fork upgrade proposals, with the associated clients being Bitcoin ABC and Bitcoin SV. 

Hence, a potential chain split is the news; while users holding BCH prior to the hard-fork could end up with coins on both sides of the split.

Well, on settlement grounds, the BCHZ18 contract will settle at a price on the Bitcoin ABC side of any split and will not include the value of Bitcoin SV.

This is consistent with the approach BitMEX took when Bitcoin Cash initially split off from Bitcoin in August 2017. The Bitcoin / USD contracts were settled based on the Bitcoin price at the time and did not reflect the price of Bitcoin Cash.

Impact on the BitMEX. BBCHXBT Index:
The BitMEX. BBCHXBT Index is currently comprised of the following constituent exchanges:

⅓ * Poloniex + ⅓ * Binance + ⅓ * Kraken.

At the time of the fork, if the constituent exchanges use the BCH/XBT symbol for the BCHABC chain then BitMEX will keep that symbol as a reference, otherwise BitMEX will refer to the relevant BCHABC/XBT symbol to be used as part of the Index.

The BCH price sentiment in the intermediate phase: The consolidation phase in the current intermediate trend attempts to spike above 7EMAs on hammer & engulfing patterns but restrained below 21EMAs (refer weekly plotting), more rallies possible only upon break-out above stiff resistance.

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards -133 levels (which is bearish), and hourly USD spot index has bearish index is creeping at -26 (mildly bearish) while articulating (at 07:31 GMT). 

For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex

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