Bull Market Early or Bear Market Trap?


For virtual currency investors, the most important question is whether this cycle of rising currency prices is a rebound in the bull market or a trap in the bear market.

Bitcoin went through a price spike last night in just an hour. The price rose from the violence of around 6,800 U.S. dollars to a maximum of 8,100 U.S. dollars. It increased by almost 20% during the day. Under the leadership of Bitcoin, other virtual currencies have also ushered in a strong rebound, with gains in the single currency even exceeding 50%. Faced with the collective warming of the virtual currency market, many investors shouted that "the bull market is back".

According to data from the CoinMarketCap site, the market value of Bitcoin increased by almost 20 billion US dollars in one day, and the entire virtual currency market also experienced general market growth. There was no "research" effect. According to Bitcoin's daily trading volume exceeding 9 billion U.S. dollars, there should be billions of additional funds on the market yesterday, instead of equity funds.

In fact, at the time of the Bitcoin boom, Bitfinex, a digital currency trading platform, also recorded a number of significant purchases. With the increase in Bitcoin purchases, many shorts have been forced to close their positions, further widening the upward trend in the market. Nick Kirk, Cypher Capital's data manager, also expressed his approval for the phenomenon. At the same time, he also believes that this sharp rebound is more likely to be the answer to the release of the first regulatory pressures.

Pantera Capital Management, one of the largest digital currency hedge funds in the world, said Bitcoin had bottomed out. The 6,500 U.S. dollars is the low point of Bitcoin's bear market. Bitcoin will be above this price for most of this year and could even surpass the record high of 20,000 US dollars last year.

Fundstrat founder Tom Lee also expressed confidence in Bitcoin. He believes that the current Bitcoin P / B ratio and other indicators are almost the same as those of the end of 2014 in the bear market, and has formed a significant technical correction. Based on this, he said the value of Bitcoin could increase more than three times this year and reach 25,000 U.S. dollars by the end of this year.

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

Of course, the volume of Bitcoin OTC is also showing signs of market recovery. Since March, Bitcoin trade volumes in Canada, Europe, Vietnam, Mexico and Vietnam have increased and reached record levels.

With the successive admission of large financial institutions such as the hedge fund giant Soros and the first financial group of the Rockefeller family, the financial size of the virtual money market will be further enlarged.

However, it should be noted that although Bitcoin is currently going up sharply, it is still in a downtrend channel and has not yet been effectively broken. It remains to be seen whether the virtual currency market has actually reversed. Investors should always be vigilant and pay attention to the management of positions.

Most importantly, the major global Bitcoin markets, including the United States, have sought to establish regulatory frameworks. Regulatory uncertainty will inevitably have a greater impact on the short-term development of the virtual currency market. In the long run, an orderly and healthy market can go even further.

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