Bull Market Early or Bear Market Trap?

For virtual currency investors, the key question is whether the current round of price increases is a bull market resumption or a bear market trap.

Last night Bitcoin experienced a soaring price in just an hour. The price has risen from a soaring $6,800 to a high of $8,100. It rose nearly 20% over the course of the day. Driven by Bitcoin, other virtual currencies also ushered in a strong rally, with a single currency even surging by more than 50%. Faced with the collective recovery of the virtual currency market, many investors chanted “the bull market is back”.

According to data from CoinMarketCap website, Bitcoin’s market value has increased by nearly $20 billion in one day and the entire virtual currency market has also experienced overall market growth. There is no “seeking” effect. According to the calculation of Bitcoin’s daily trading volume of more than $9 billion, billions of incremental funds should enter the market yesterday instead of equity funds.

In fact, in the booming era of Bitcoin, the digital currency trading platform Bitfinex recorded several large purchases. With the increase in bitcoin purchases, many short positions were forced to close, further extending the market’s uptrend. On this phenomenon, Cypher Capital data director Nick Kirk also agreed. At the same time, he also believes that the sharp recovery is more a reaction to the disappearance of previous regulatory pressure.

Pantera Capital Management, one of the world’s largest digital currency hedge funds, said Bitcoin has bottomed out. USD 6,500 is the low of the Bitcoin bear market. Bitcoin will be above this price for most of this year and may even exceed the all-time high of $20,000 set last year.

Fundstrat founder Tom Lee also expressed his confidence in Bitcoin. He believes that Bitcoin’s current price-to-book ratio and other indicators are basically the same as the bear market of late 2014 and a major technical correction has formed. Based on this, he stated that Bitcoin’s value could rise more than three times this year and reach $25,000 by the end of this year.

Historical data shows that Bitcoin did rise in the second quarter of the calendar year. In the second quarter of 2011, Bitcoin rose to 1964%, 36.25% in 2012… 61.98% in 2016 and 131% in 2017.

Of course, Bitcoin OTC trading volume is also showing signs of market recovery. Since March, Bitcoin transactions in Canada, Europe, Vietnam, Mexico and Vietnam have continued to rise, reaching record highs.

With the successive arrival of major financial institutions such as hedge fund giant Soros and the financial top group Rockefeller family, the financial scale of the virtual currency market will expand further.

However, it is worth noting that although Bitcoin is currently rising strongly, it is still in a downward channel and has not yet broken through effectively. It remains to be seen whether the virtual currency market will actually reverse. Investors should always remain vigilant and pay attention to position management.

Leave a Reply

Your email address will not be published. Required fields are marked *