Bull Market Early or Bear Market Trap?

For virtual currency investors, the more important question is whether this round of rising currency prices is a reset of the bull market or a bear market trap.

Last night bitcoin experienced a high price in just one hour. The price has risen from a violence of about $ 6,800 to a maximum of $ 8,100. During the day it grew by almost 20%. Under the leadership of bitcoin, other virtual currencies have also started a strong rebound, profits in one currency have even exceeded 50%. Faced with the collective warming of the virtual currency market, many investors have shouted that the “bull market is back”.

According to CoinMarketCap, the market value of bitcoin has increased by almost $ 20 billion a day, and the entire virtual currency market has also experienced overall market growth. There was no “search” effect. According to the daily volume of bitcoin transactions, which exceeds 9 billion US dollars, billions of additional funds should enter the market yesterday, not stock funds.

In fact, during the bitcoin boom Bitfinex, a platform for digital currency trading, also recorded a number of major purchases. With the growth of bitcoin purchases, many shorts have been forced to close their positions, further expanding the market growth trend. In connection with this phenomenon, Nick Kirk, director of data according to “Cypher Capital”, also expressed his approval. At the same time, he also believes that this sharp rebound is likely to be a response to the release of early regulatory pressure.

Pantera Capital Management, one of the world’s largest hedge funds in the field of digital currencies, said bitcoin has bottomed out. $ 6,500 is the minimum copper for the bearish bitcoin market. For most of this year, bitcoins will be above that price and may even surpass the record of $ 20,000 last year.

Fundstrat founder Tom Lee also expressed confidence in bitcoins. He believes that the current Bitcoin P / B ratio and other indicators are almost the same as the bear market in late 2014, and has formed an important technical correction. Based on that, he said the value of bitcoin this year could more than triple and by the end of this year had risen to $ 25,000.

Historical data show that bitcoin did grow in the second quarter of the calendar year. In the second quarter of 2011, bitcoins grew by 1964%, by 36.25% in 2012 … 61.98% in 2016 and 131% in 2017.

Of course, the volume of OTC bitcoins is also showing signs of market recovery. Since March, bitcoin trading volumes in Canada, Europe, Vietnam, Mexico and Vietnam have grown to record highs.

With the consistent admission of major financial institutions such as hedge fund giant Soros and Rockefeller’s major financial group, the financial size of the virtual money market will be further expanded.

However, it should be noted that despite the fact that bitcoin is currently growing strongly, it is still in the downstream channel and has not yet been effectively disrupted. It remains to be seen whether the virtual currency market has really changed. Investors should always be vigilant and pay attention to position management.

More importantly, the world’s major bitcoin markets, including the US, have sought to create a regulatory framework. Uncertainty of regulation will inevitably have a greater impact on the short-term development of the virtual currency market. In the long run an orderly, healthy market can go even further.