Strength of Hive Dollar || Correlation between Volume & Price
Whenever anybody want to invest at Forex market or any other currencies either foreign currency or cryptocurrency, he should consider some characteristics and behaviours of that currency. He should also know about recent trends and historical data about different currencies to assume the strength of the relative currency..
What about Hive Dollar?
From the very beginning, Hive Dollar tends to exchange at a very close rate to USD. It has fluctuated in the meantime at a very little bit and tried to go away parallel with USD.
Hive Dollar was at the highest exchange rate ever that was 1.08 USD/HBD at 18 May'2020 and at the lower lowest exchange rate as 0.56 USD/HBD at 9 April'2020.
At the total lifetime of Hive Dollar, the average exchange rate I have calculated that is $0.905775.
exchange rate of HBD against USD source: www.coingecko.com
Now the price is a little bit higher than the average line and it maintained on last week about 2 to 3% higher than the average.
The picture below shows that the average line of Hive Dollar exchange rate is upward slapping slowly that means the strength of HBD is increasing day by day and it is going to touch USD in future if the trends going on.
Though it will take some time, but I believe that one day it will resemble to the price level of USD.
Relation of volume and price
In accordance to the theory of economics, whenever the money supply and volume of a currency increases, the strength of that currency is lost due to the interaction between demand-supply curve.
But in case of cryptocurrency, the volume or supply of a certain currency is proportional to the exchange rate or strength of that currency.
Because the currency is generated due to the demand and when currency is generating more it indicates that the demand of that currency also is expanding.
There is a positive correlation between the volume and exchange rate of a cryptocurrency as well as in case of Hive Dollar.
You will observe this correlation in case of Hive Dollar on the graphical representation below the Blue Line represents the fluctuation% of volume/supply and the Red Line represents the fluctuation% of Exchange Rate against USD.
The graph may be interpreted as a positive correlation between the price and volume of the currency as the both lines tends to fluctuate almost similarway, though there are some distances and misbehaves.
The Green Line is showing the average of both price and volume as it is the zero percentage on fluctuation.
So that traders who want to invest or trade with Hive Dollar, I think this is comparatively secure for long time investment. Though it is a very new currency, the trend and historical data representing some positive indications.
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