Understanding Bitcoin SV from a Data perspective
Despite recent volatility and fear in the financial world, the past week has been positive for the crypto market as a whole. It seems that there is more confidence from investors as we can see some signs of price recovery. After the huge sell-off from a couple of weeks ago, all major cryptocurrencies have accrued important gains. Our intention at IntoTheBlock is to see past through the current situation and try to understand what is happening at the blockchain level of any asset with a data-driven approach that can give investors an edge to complement their investment decisions.
For today’s article, the idea is to analyze the performance of Bitcoin SV (Satoshi Vision) and what are the metrics driving its development as a relevant asset in the crypto market. At the time of writing, BSV is trading at a price of $171.44 USD, recovering 9% of its value in the past 7 days. During the first three months of 2020, BSV has had an 89% price appreciation. Currently, the cryptocurrency has almost $3.15 billion of market cap ranking number 6 on the list of most relevant crypto-assets.
Bitcoin SV history has been highly controversial from its origin. Architecturally, it was created out of the hard fork of Bitcoin Cash on November 15, 2018, migrating business and developers to its ecosystem. It is well documented that a faction within the Bitcoin Cash community led by Craig Wright and Calvin Ayre, disagreed with the proposed upgrade to the protocol that included Canonical Transaction Ordering (CTOR) and OP_Checkdatasig. They argued that those upgrades weren’t secure and that they would corrupt the original vision of Bitcoin as digital cash. The disagreement resulted in the hard fork that created Bitcoin SV as a competing version of the BCH protocol that seeks to emulate the proposed original vision of bitcoin through scaling on-chain as fast as possible. Mainly the Bitcoin SV was launched with a higher block size limit of 128 MB to support significantly higher transaction volumes.
Since the fork, the dispute has moved towards the hash power of miners. BSV uses the same hashing algorithm as Bitcoin and Bitcoin Cash making it quite easy to switch mining rigs into their platform. So far, Bitcoin SV has rarely been profitable to mine. Also, crypto exchanges suffered a period of uncertainty regarding this controversy. For example, Coinbase suspended all trading activity in BCH for a few months to accept them again afterward, while BSV is still not supported by the leading exchange.
Currently, the Bitcoin SV team is focusing on building a community and market of their own aiming to facilitate micropayment transactions that allow their users to monetize their web-based content.
Bitcoin SV has been highly polarizing since its creation, capturing the attention of the crypto community around the world. Now that we have a basic understanding of the project, I want to go deeper into the analysis of its performance using a data-driven approach leveraging the IntoTheBlock platform which combines hundreds of factors to extract unique insights about an asset.
To start, we can see how the “Quick View” Signals reveal that currently there is an overall bearish sentiment on Bitcoin SV. The Actionable Signals section below contains momentum signals based on IntoTheBlock’s underlying indicators that provide a bullish or bearish sign based on on-chain indicators. For example, the Net Network Growth is slowing when we consider the number of new addresses and addresses going to a zero balance. This may be interpreted as a sign that the pace of adoption of the network is not fast enough. Also, there is evidence of “Large Transactions” going down, This indicator tracks on-chain transactions larger than $100k that can be considered as movements from big or institutional players.
- Taking a look at holders around the current price
In the graph below, we can see addresses that bought BSV between $144.68 USD and $196.31 USD. IntoTheBlock’s “In/Out of the Money Around Current Price” model reveals that 32,470 addresses bought 443,210 BSV at an average price of $172.77. This major cluster of holders can be considered as a resistance area for the upward trajectory of the price.
- The transaction activity is slightly increasing.
During the past week, BSV’s increasing price has been accompanied by a growing number of transactions and the corresponding volume. For the last 7 days, Bitcoin SV averaged a total of 551,310 on-chain transactions per day for a total of 4.38 million transactions. With those 4.38 million on-chain transactions, $800 million USD were traded.
- Evidence of more trading activity from the East
Metrics revealed by IntoTheBlock´s East-West analysis show that BSV is a worldwide traded token but with a slightly higher activity of 56.10% predominance from the eastern hemisphere where the adoption seems to be faster. Also, in the last 3 days, we can see a spike in the number of transactions which complements the idea explained above regarding the increment of transaction activity.
- 75% of BSV current holders are retail investors.
The image above shows IntoTheBlock’s concentration signal which indicates accumulation by Large Holders of BSV. IntoTheBlocks´s Ownership indicators reveal that 106 addresses control 25% of the outstanding number of Bitcoin SV tokens.
- Derivatives for Bitcoin SV are still very early.
Derivatives are certainly one of the fastest-growing segments in crypto, but in the case of BSV, the market is super nascent. So far, the average daily volume traded in Derivatives remains in the low end of $77 USD million arriving towards a 7-Day-High of $145 USD million. Just to have a reference, the average daily volume traded on the past 7 days for Bitcoin Derivatives was $12 USD billion.
This market for BSV still has a long road for growth as more exchanges start to offer these types of products to their users.
As Bitcoin SV continues its evolution within the crypto market, some of these indicators show different views and perspectives to better understand and analyze the asset. Bear in mind that at IntoTheBlock we will keep looking for new and interesting patterns that are emerging.
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