Bull market early or bear market trap?

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

Yesterday evening, Bitcoin rose in price in a single hour. The price rose to a maximum of $ 8,100 from the $ 6,800 violence. It rose by almost 20% during the day. Under the guidance of Bitcoin, other virtual currencies also bounced back, with single-currency gains exceeding 50%. Faced with the collective warming of the virtual currency market, many investors shouted “the bull market is back”.

According to data from the CoinMarketCap website, the market value of Bitcoin increased by almost $ 20 billion in one day, and the entire virtual currency market experienced an overall growth of the market. There was no “search” effect. With the daily transaction volume of Bitcoin, more than US $ 9 billion, billions of additional funds should have entered the market yesterday instead of equity funds.

In fact, during the rise of Bitcoin, Bitfinex, a digital currency trading platform, also recorded a large number of purchases. With the rise in buying bitcoins, many shorts were forced to close their positions, further widening the upward trend of the market. Nick Kirk, data director at Cypher Capital, also expressed approval for the phenomenon. At the same time, he believes that this sharp rebound is likely to be a response to the release of early regulatory pressures.

Pantera Capital Management, one of the largest hedge funds for digital currency, said Bitcoin has hit rock bottom. The US $ 6,500 is a low point for the Bitcoin bear market. Bitcoin will be above that price for most of this year and may even surpass the US $ 20,000 record last year.

Founder Tom Lee Fundstrat also expressed confidence in Bitcoin. He believes that the current Bitcoin P / B ratio and other indicators are almost the same as at the end of the 2014 bear market, and has completed a major technical correction. Based on that, he noted that the value of Bitcoin could rise more than threefold this year to $ 25,000 by the end of this year.

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

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

With the huge approval of the giant Soros hedge fund and the financial groups of the major Rockefeller families, the financial size of the virtual money market will expand further.

However, it is worth noting that although Bitcoin is currently on the rise, it is still in a downward trend channel and has not yet been effectively broken. It remains to be seen whether the virtual currency market has actually been overthrown. 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. 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 and healthy market can go further.