After it staged a rally that resulted in the value increase of more than 170% in just a day, Bitcoin SV has already returned nearly 80% of those gains. The initial rally raised many eyebrows as it appears that it was a manipulated move.
Bitcoin SV (BSV), founded by Craig Wright – who claims to be Satoshi Nakamoto – railled on January 14 on the rumours that Wright has private keys to around $9 billion worth of Bitcoins. Around 50% of this amount is seeked by legal representatives of the late David Kleiman, Wright’s business partner.
“Dr. Wright notifies the Court that a third party has provided the necessary information and key slice to unlock the encrypted file, and Dr. Wright has produced a list of his bitcoin holdings, as ordered by the Magistrate Judge, to plaintiffs today,” it is said in a legal document relating to a court case involving Wright.
Wright insists that he has keys to access hundreds of thousands of BTC mined during the chain’s early days, a notion that has been heavily disputed by the bulk of cryptocurrency community.
However, media outlets reported the following day that Wright does not have the private keys to unlock Satoshi’s BTC.
“The file that he’s received did not include private keys,” said Andres Rivero, partner at Rivero Mestre law firm.
As stated in the tweet of Nicholas Merten, a cryptocurrency analyst, it seems that the entire move upwards has been manipulated as there is no real volume behind the breakout.
Technical analysis: Failed breakout may lead to more losses
As a result of Rivero’s claims, BSV/USD moved lower immediately to re-test the key horizontal support, the previous resistance, at $255.
On the previous day, the price action printed a record high of $458.74, before losing nearly 50% in value on the following day. It seems that the BSV/USD pair is now consolidating around the key horizontal support.
Given that the previous record high for BSV/USD was $255.62, the January 14 move has been made under unclear circumstances. The early buyers that took the price to above $400 may have already left the trade and the price may slip further. The next major support for the pair is located around the $177 handle.
Bitcoin SV burst higher on January 14 on the rumours that its founder, Craig Wright, has the private keys to unlock hundreds of thousands of Bitcoins mined in the early days. However, these claims were dismissed by a legal firm, which caused the price to return nearly 80% of the previous gains.
Given the unclear circumstances under which Bitcoin SV trades and operates, it is best to stay away from investing in this particular cryptocurrency.