With bitcoin prices about $600 below their all-time highs, traders look to the next 3 months to determine their strategy

Prior to August, with the announcement of SegWit2X, it looked as if Bitcoin had reached a solution to the long and contentious scaling debate. The proposal itself appeared to be the best of both worlds with it's plan to both activate SegWit and subsequently increase the block size in November. The general thinking was that a hard fork of Bitcoin would now be avoided. As August 1st approached, however, it became clear that a smaller faction of users planned to fork the network anyway, resulting in the creation of what is now known as Bitcoin Cash.

While Bitcoin (BTC) and Bitcoin Cash (BCH) seem to be coexisting for the moment, it appears the BTC network may be in for another fork in the road as the second phase of the SegWit2X scaling plan takes effect in a few months time. The reason of this is that some users characterize SegWit2X as attempting to "corporatize" Bitcoin and, now that SegWit is about to be active, see no reason to increase the block size.

Should the Bitcoin blockchain fork a second time, and should that fork result in a third variant of Bitcoin, the damage to the overall brand will likely be done. Bitcoin's two major value propositions are its simplicity and it's network of users and, if no clear winner emerges from the scaling war, both of these could be significantly compromised.

So how are traders reacting to the situation?
From what can be seen of the recent price action, a few appear to be moving money out of Bitcoin and into Ethereum and other cryptocurrencies; some may be moving a bit back into fiat as well. As a whole, the market cap for cryptocurrency, as calculated by CoinCap.io has dropped a couple billion U.S. dollars over the past few days indicating some broader moves to fiat.

Ether prices have responded by breaking from the $300 rut they had been in for weeks and reaching as high as $340 in yesterday's trading. They have since come down a bit as of 8/22/2017.

While the recent run up in Bitcoin Cash is likely due to a variety of factors, it's likely that some of the recent gains are from sales of BTC.

All eyes are on the news as the possibility of a second split is weighed.