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For virtual currency investors, the more important question is whether this round of currency price rises is a restart of the bull market or a bear market trap.
Yesterday evening, Bitcoin experienced a soaring price in just one hour. The price rose from the violence of about 6,800 U.S. dollars to a maximum of 8,100 U.S. dollars. It rose by nearly 20% during the day. Under the leadership of Bitcoin, other virtual currencies also ushered in a strong rebound, with single currency gains even exceeding 50%. Faced with the collective warming of the virtual currency market, many investors shouted that “the bull market is back.”
According to data from the CoinMarketCap website, Bitcoin’s market value increased by nearly 20 billion U.S. dollars within a day, and the entire virtual currency market also experienced general market growth. There was no “seeking” effect. According to the daily transaction volume of Bitcoin exceeding 9 billion U.S. dollars, there should be billions of incremental funds entering the market yesterday, instead of stock funds.
In fact, in the time of the booming of Bitcoin, Bitfinex, a digital currency trading platform, also recorded a number of large purchases. With the increase in buying Bitcoins, many shorts were forced to close their positions, further expanding the market’s upward trend. For this phenomenon, Nick Kirk, data director of Cypher Capital, also expressed his approval. At the same time, he also believes that this sharp rebound 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 Bitcoin has bottomed out. The 6,500 U.S. dollar is the low point for Bitcoin’s bear market. Bitcoin will be above this price for most of this year and may even exceed the record high of 20,000 U.S. dollars last year.
Fundstrat founder Tom Lee 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 2014 bear market, and has formed an important technical correction. Based on this, he stated that the value of Bitcoin may rise more than three times this year and rose to 25,000 U.S. 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 rose as much as 1964%, 36.25% in 2012… 61.98% in 2016 and 131% in 2017.
Of course, Bitcoin OTC volume also shows signs of market recovery. Since March, Bitcoin trading volumes in Canada, Europe, Vietnam, Mexico, and Vietnam have risen and reached record highs.
With the successive admission of major financial institutions such as hedge fund giant Soros and top financial group Rockefeller family, the virtual money market’s financial size will be further expanded.
However, it is worth noting that although Bitcoin currently has a strong rise, it is still in a downtrend channel and has not yet been effectively broken. It remains to be seen whether 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. The 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.
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Source by Marko Vidrih
