Bull Market Early or Bear Market Trap?

For virtual money investors, the more important question is whether this phase of currency price increases is a resumption of the bull market or a bear market trap.

Last night, Bitcoin experienced a price increase in just one hour. The price increased from a whopping 6,800 US dollars to a maximum of 8,100 US dollars. It went up by nearly 20% during the day. Under Bitcoin’s leadership, other virtual currencies have also started a strong rebound, with a currency gain of even more than 50%. Faced with the collective warming of the virtual money market, many investors are shouting that “the bull market is back.”

According to data from the CoinMarketCap website, the market value of Bitcoin has risen by nearly 20 billion US dollars in a single day, and the entire virtual currency market has also experienced overall market growth. There is no “search” effect. With the daily Bitcoin transaction volume exceeding 9 billion US dollars, there should have been billions more funds entering the market yesterday, rather than stock funds.

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

Pantera Capital Management, one of the largest digital currency hedge funds in the world, says Bitcoin is already low. 6,500 US dollars is the low point for the Bitcoin bear market. Bitcoin is above this price for most of this year and may even surpass the record high of 20,000 US dollars last year.

Fundstrat founder Tom Lee has also expressed confidence in Bitcoin. He believes that the current Bitcoin P/B ratio and other indicators are almost the same as the end of the 2014 bear market, and are forming an important technical correction. Based on this, he stated that the value of Bitcoin could rise more than three times this year and rise to 25,000 US dollars by the end of this year.

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

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

With the successive admissions of major financial institutions such as hedge fund giant Soros and leading financial group Rockefeller family, the scope of virtual money finance will further expand.

However, it is worth noting that even if Bitcoin is currently on a strong rise, it is still in a downtrend channel and has not yet been effectively broken. It remains to be seen if the virtual money market will actually break down. Investors should always be vigilant and pay attention to position management.

Above all, the world’s major Bitcoin markets, including the United States, seek to establish regulatory frameworks. Regulatory uncertainty will inevitably have a greater impact on the short-term growth of the virtual money market. Eventually, a smooth, healthy market can still continue.