Here is a look at three issues that could spell trouble for Bitcoin SV in the near future
Bitcoin SV (BSV) has managed to perform well despite the ongoing global health crisis that has hit economies had, including the crypto market. The number five largest crypto by market cap has gained 90% year-to-date. It has undergone a pre-programmed supply rate cut.
Despite this, the coin is maintaining its bullish bias in the medium-term in a critical technical support area. But the figures that make the asset reliably bullish is missing for BSV. Experts have linked this incident to three different issues, including low volatility, poor volume, and profit-taking.
The role of the low volatility and profit-taking on Bitcoin SV
In the early days of April, BSV was trading between the ranges of $141 and $209. But now, this figure has reduced to $ 167 and $ 212, according to data given by the Bollinger Bands. Bollinger Bands typically measures an asset’s rate of volatility with the gap between its standard deviations. The more significant the gap, the higher the volatility of the asset. If it tightens, the asset will be trading tighter, which leads to price breakouts.
Minor volatility can be good news for an asset because it will show the asset level of stability. But for Bitcoin SV, minor volatility suggests that the coin’s market is losing steam. Meaning, a breakout to either position is a possibility. This type of scenario can weaken Bitcoin SV’s Blockchain security because the fewer number of miners will make the Blockchain network more centralized. It could leave the network more susceptible to attacks, which could be a bearish signal for Bitcoin SV.
BSV/USD volatility indicators | Source: TradingView.com
The role of the poor volume
The likelihood of BSV undergoing a price drop has risen further because of the coin’s decline in trade volume. This is easily a signal that traders are not coming into the market. It means that the traders who have maintained their BSV gains are now fewer. The price of the coin is going up, which is a divergence.
BSV/USD price-volume divergence | Source: TradingView.com
In a market recovery, lower volumes is a sign that traders are still concerned about prices. This typically comes after a correction. If the market is on the rise, a lack of long points could cause low volumes. Now traders think that resistances have been established.
The issue of profit-taking puts Bitcoin SV at a risk of posting sharp declines. The price of the coin could inevitably fall hard due to profit-taking because it is one of the top crypto assets. It is sitting on top of very attractive yearly gains despite the economic crisis. Profit-taking has risen because of the increase in cash liquidity due to panic caused by the Coronavirus.
Traders and investors could utilize the cryptocurrency to cover their losses elsewhere, leading to a sharp drop. The next downside target is at $137 – the 78.6% level of the Fibonacci retracement graph. For that, BSV needs to break below the blued 50-daily MA curve; it is behaving as short-term support.
Read more:
- Roger Ver: My Long Term Goal Is To Increase The Demand For Bitcoin Cash By Making Them More Useful To People
- The Decision From The Bitcoin SV Camp To Password-Protect Their Road Map Seems Like A Curious One