Further deeper, from the correlation report, we observed BSV’s volatility level is pretty high, compared to others and it shows a detaching relationship of itself from others (correlation with BTC= 0.38, which is relatively low) at price drop, and marching together (correlation with BTC= 0.66, which is relatively high) at price up.
Thus, we chose to look deeper at how this can lead to any investment idea.
High volatility leads to higher returns, with robust trading assumptions and execution.
Since it is a strategy implemented by many professionals and active traders, in both the traditional and crypto markets, we simply check this trading opportunity with relevant markets.
As shown above, there are some price discrepancies between the two markets, and this is an absolute opportunity for (almost) riskless trading profit.
Thus, we implemented simple and robust trading logic: “Buy cheap, Sell expensive”, between two markets, with the initial investment of 10,000 USDT. With trading signals based on price differences, we put a fixed amount of position long and short at each trade, assuming no transaction fees, slippages, etc.
Here we can see the balance changes of each exchange and total balance, which is DOUBLED!
If BSV is working well, we may think about others, especially BTC. So we select another exchange B, which is one of the most liquid markets for BTC/USDT trading.