Bitcoin just surmounted the $8,000 level, topping out at $8,020 on Bitfinex before retreating to $7,900 at press time. By now, reading about Bitcoin’s breach of its previous high might be getting repetitious, so strong has the currency’s bull run been. This time is an exception, though, because Bitcoin just pulled the mother of all head fakes.
About a week ago, the SegWit2x hard fork was cancelled and the price immediately spiked from $7,200 to $7,800. But within the hour, the price had dropped and continued to fall further. Just a few days later, Bitcoin had sunk to a local low of $5,500, while rival Bitcoin Cash shot up from $600 to $2,600. At the time, a large number of Bitcoin miners had moved to Bitcoin Cash and the number of unconfirmed transactions soared to over 135,000. Fees increased commensurately.
Things didn’t look good. Bitcoin had just officially eschewed the only near-term solution to the scalability crisis. SegWit, which was adopted back in August, will take time to gain traction as wallet providers must include the feature and users must voluntarily begin using it. Lightning Network, Bitcoin’s long-term scaling plan, is still in testing and not ready for primetime yet. With the cancellation of 2MB blocks, it became obvious that there would be no quick fix to the currency’s scaling problem.