Brief History of Hive Pumps
On Friday, the Hive price reached 65 cents, up 30% in 3 hours. When writing this article, the Hive price was just above the 50-cent level where the movement started. The 30-minute chart below shows the course of the action.
Friday's Hive pump wasn't the first and probably won't be the last. Korean whales like to invest in Hive and HBD accompanied by high volume. We understand that the movement originates from Korea, as the volume is mainly realized through the Hive/KRW pair.
A brief look at the history of Hive pumps can guide us on how we should react to such movements because those who have liquid Hive have had a chance to increase the number of Hives they have in the last two days by 20% to 30%.
I consider the price increases, in which Hive rapidly gained value against Bitcoin, as a "pump." Because these price increases are not permanent.
April 23, 2020
Between April 23 and April 27, 2020, the Hive price rose from 12 cents to 90 cents. The main reason for the price increase was Binance's listing of Hive. By May, the price had dropped to 36 cents. We understand that the price has stabilized at three times the starting point.
November 23, 2021
Between November 23 and November 26, the Hive price rose from $1.09 to $2.60. I'm guessing the increase is related to the growing popularity of play-to-earn games. Because, at that time, Hive had proven to be a scalable network thanks to Splinterlands. Hive price dropped to $1.50 on December 11.
June 27, 2022
Between June 27 and June 29, the price of the Hive rose from 41 cents to 63 cents. There was no apparent reason for the increase besides Hive being an undervalued network. The price fell to 44 cents on July 4.
August 1, 2022
Between August 1 and August 2, the Hive price rose from 53 cents to 79 cents. There was no apparent reason for the increase besides Hive being an undervalued network. On August 3, the price dropped to 60 cents.
October 7, 2022
Hive price, which I mentioned above, reached 65 cents with an increase of 30% on October 7. When writing this article, the Hive price was just above the 50-cent level where the movement started. Price action began when the Hive was 50 cents.
The above data shows that the price generally picks up quickly and stabilizes above the starting point after a few days. If there is an apparent reason, a more significant portion of the rise becomes permanent.
The last three pumps originated in Korea and appeared for no apparent reason. In all three, the crypto market was adverse. The movements appeared accompanied by a high volume. They should have made the purchases in stages if they intended to invest long-term. Those with this much capital should be aware of the Wyckoff methodology. Are they aiming to sell to those who want to join the uptrend? This simple explanation, following Occam's razor principle, seems plausible. On the other hand, FOMO may be accelerating the uptrend. Because big investors know that Hive is undervalued, they may wait for others to take action first.
It was obvious that especially the last three rises would not be permanent. And the increase was very rapid. So we must keep some of the Hive in liquid form. The advantage of holding Hive investments over Polycub or Cubdefi has become apparent. Because on these platforms, we can earn returns in liquid Hive and HBD.
Currently, appr. 40% of Hive is held as a liquid by investors. These people can take advantage of the opportunities in the market while giving up the benefits of the Hive power.
We can sell because prices have increased by 30-40% and are deprived of returns such as 3x - 5x. It is worth remembering that the price of the Hive increased 15 times in 2021. Are there any apparent criteria for deciding when to sell? We can sell if the price increase is disconnected from the general market and is not based on an evident reason. So we can increase the Hive we have when the price goes down.
The optimal solution may be to invest in the following Cubdefi pools. Because when HBD rises above 1 dollar, it is obvious what needs to be done. When there is indecision about the Hive, we can make incremental sales during pumps. The important thing is to not give up on liquidity while gaining returns.
I am not an investment advisor. Please do your own research.
Thank you for reading.
Posted Using LeoFinance Beta