For virtual currency investors, the bigger question is whether this round of currency price increases is a bull market reset or a bear market trap.
Last night, Bitcoin experienced a dizzying price in just one hour. The price went from the violence of about $ 6,800 to a high of $ 8,100. It was up almost 20% during the day. Under Bitcoin’s leadership, other virtual currencies also ushered in a strong rally, with single-currency gains even exceeding 50%. Faced with the collective heating of the virtual currency market, many investors shouted that “the bull market is back.”
According to data from the CoinMarketCap website, the market value of Bitcoin increased by almost 20 billion US dollars in one day, and the entire virtual currency market also saw overall market growth. There was no “search” effect. According to the daily trading volume of Bitcoin exceeding 9 billion US dollars, yesterday there should be billions of incremental funds entering the market, rather than equity funds.
In fact, at the time of the Bitcoin boom, Bitfinex, a digital currency trading platform, also recorded a number of large purchases. With the increase in the purchase of Bitcoins, many shorts were forced to close their positions, further expanding the uptrend of the market. For this phenomenon, Nick Kirk, Cypher Capital’s chief data officer, also expressed his approval. At the same time, he also believes that this strong rally is more likely to be the response to the release of early regulatory pressures.
Pantera Capital Management, one of the world’s largest digital currency hedge funds, said that Bitcoin has bottomed out. $ 6,500 is the lowest point for the Bitcoin bear market. Bitcoin will be above this price for most of this year and may even break the record of US $ 20,000 last year.
Fundstrat founder Tom Lee also expressed his confidence in Bitcoin. He believes that the current Bitcoin P / B ratio and other indicators are almost the same as those of the late 2014 bear market, and it has formed a major technical correction. Based on this, he claimed that the value of Bitcoin may increase more than three times this year and rose to 25,000 US dollars at the end of this year.
Historical data shows that Bitcoin has indeed risen 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, Bitcoin’s OTC volume is also showing signs of a market recovery. Since March, Bitcoin trading volumes in Canada, Europe, Vietnam, Mexico, and Vietnam have risen to record highs.
With the successive admission of major financial institutions, such as hedge fund giant Soros and the leading financial group of the Rockefeller family, the financial size of the virtual money market will expand further.
However, it is worth noting that although Bitcoin is currently on a strong rise, it is still in a downtrend channel and has not yet effectively broken down. It remains to be seen if the virtual currency market has actually reversed. Investors should always be vigilant and pay attention to position management.
More importantly, the world’s major Bitcoin markets, including the United States, have sought to establish regulatory frameworks. Regulatory uncertainty will inevitably have a major impact on the short-term development of the virtual currency market. In the long term, an orderly and healthy market can go even further.