For virtual currency investors, the more important question is whether this round of rising currency prices is a restart of the bullish market or a bearish trap.
Last night the price of bitcoin rose in just an hour. The price has risen from violence to about $ 6,800 to a high of $ 8,100. During the day it grew by almost 20%. Bitcoin-led other virtual currencies have also led to a strong rebound, with profits from a single currency even exceeding 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 rose by almost $ 20 billion during the day, and the entire virtual currency market 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 equity funds.
In fact, during the Bitcoin boom, Bitfinex, a digital currency trading platform, also recorded a number of major purchases. With the increase in bitcoin purchases, many shorts were forced to close their positions, which further broadened the trend of market growth. Nick Kirk, director of Cypher Capital, also praised the phenomenon. At the same time, he also believes that this sharp rebound is likely to be a response to the removal of early regulatory pressure.
Pantera Capital Management, one of the world’s largest digital currency hedge funds, said bitcoin has hit rock bottom. $ 6,500 is the lowest point for the bitcoin bear market. For most of this year, bitcoin will be above that price and may even exceed a record high of $ 20,000 last year.
Fundstrat founder Tom Lee also expressed confidence in Bitcoin. He believes that the current Bitcoin P / B ratio and other figures are almost the same as in the bear market at the end of 2014, and has formed an important technical correction. Based on this, he said that the value of bitcoin could more than triple this year and rose to $ 25,000 later this year.
Historical data show that bitcoin did grow in the second quarter of the calendar year. In the second quarter of 2011, bitcoin rose by as much as 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 trading in Canada, Europe, Vietnam, Mexico and Vietnam has grown and reached record highs.
With the consistent admission of major financial institutions such as the hedge fund giant Soros and the leading financial group of the Rockefeller family, the financial size of the virtual money market will be further expanded.
However, it should be noted that although bitcoin is currently experiencing strong growth, it is still in the downtrend channel and has not yet been effectively broken. 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, major global 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.