Bull Market Early or Bear Market Trap?

For investors of virtual currency, the most important question is whether this round of the price of the currency is a recovery of the bull market or a trap of the bear market.

Yesterday evening, Bitcoin experienced a rising price in just one hour. The price rose from the violence of about 6,800 US dollars to a maximum of 8,100 US dollars. It increased by almost 20% during the day. Under the leadership of Bitcoin, other virtual currencies also led a strong rebound, with a single currency gaining even more than 50%. Faced with the collective heating up of the virtual currency market, many investors are shouting 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 experienced a general market growth. There was no “search” effect. According to the daily transaction volume of Bitcoin more than 9 billion US dollars, there should be billions of incremental funds that entered the market yesterday, instead of stock 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 upward trend of the market. For this phenomenon, Nick Kirk, data director of Cypher Capital, also expressed his approval. At the same time, I also believe that this strong rebound is more likely to be the response to the release of the first regulatory pressures.

Pantera Capital Management, one of the largest digital currency hedge funds in the world, said that Bitcoin has touched. The US dollar 6,500 is the low point for the Bitcoin bear market. Bitcoin will be above this price for most of this year and may even exceed the record high of 20,000 US dollars last year.

Fundstrat founder Tom Lee also expressed confidence in Bitcoin. I believe that the current Bitcoin P/B ratio and other indicators are almost the same as the end of the 2014 market, and it has formed an important technical correction. Based on this, he said that the value of Bitcoin can rise more than three times this year and will rise to 25,000 US dollars at the end of this year.

Historical data shows that Bitcoin has really risen in the second quarter of the calendar year. In the second quarter of 2011, Bitcoin rose as much as 1964%, 36.25% in 2012 … 61.98% in 2016 and 131% in 2017.

Of course, OTC Bitcoin volume is also showing signs of market recovery. Since March, Bitcoin trading volumes in Canada, Europe, Vietnam, Mexico and Vietnam have risen and reached record highs.

With the subsequent admission of major financial institutions, such as the hedge fund giant Soros and the family of the Rockefeller financial group, the financial dimension of the virtual money market will be further expanded.

However, it is worth noting that, although Bitcoin is currently on a strong rise, it is still in a trend channel and has not yet been effectively broken. It remains to be seen if the virtual currency market is really reversed. Investors are always careful and attentive to the management of positions.

More importantly, the world’s leading Bitcoin markets, including the United States, have sought to establish a regulatory framework. The uncertainty of the regulation will inevitably have a major impact on the short-term development of the virtual currency market. In the long run, an orderly and healthy market can go even further.