Talk about Bitcoin | Facing the test of "financial crisis" for the first time, what will BTC do?
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
Author | Qin Xiaofeng
Editor | Hao Fangzhou
Produced | Odaily
image description
(picture from CoinTelegraph)
On Friday afternoon, Yan Song, a senior analyst at OKEx, and Kang Kang, an analyst at Odaily, visited the Odaily Chaohua community to explain in detail to users "how will BTC behave in the face of the financial crisis this time?".
The following is a record of the community interview, organized by Odaily:
Yansong believes that since mid-February, due to the spread of the epidemic and the impact of the oil price war, the volatility of various financial products has surged, and many markets and asset classes are undergoing a major adjustment period, and Bitcoin is also difficult to survive alone. Especially recently, Bitcoin has shown a strong positive correlation with the S&P index recently. Finally, on the evening of March 12, the Bitcoin market crashed due to the circuit breaker of the three major U.S. stock indexes.
Kang Kang believes that the current halving market has ended, and Bitcoin will enter a long period of low volatility. Regarding the specific point, you can pay close attention to 3100 US dollars at present, which is the starting point of the market in the first half of 2019, with relatively strong support. At the top, you can pay attention to 6400 US dollars, which has relatively strong pressure.first level title
Q1: Recently, the encryption market has plummeted across the board. Bitcoin fell below the $4,000 mark yesterday, and other cryptocurrencies are even worse. The first question is, what is the reason for this sharp drop?
Macroscopically speaking, since mid-February, due to the spread of the epidemic and the impact of the oil price war, the volatility of various financial products has surged, and many markets and asset classes are undergoing a major adjustment period. The price of Bitcoin has dropped sharply from $10,500 to around $7,400, the S&P 500 has plummeted from 3,400 to above 2,600, and the price of crude oil has plummeted from $55 to around $30. Safe-haven assets like gold are not doing as well as one might expect, with investors scrambling to sell anything that can replenish liquidity.
In the near future, Bitcoin and the S&P index have recently shown a strong positive correlation. Through the intercepted 1-minute K-line chart of the most recent period, Bitcoin operations can almost be performed through the K-line chart of the S&P 500 index. Finally, on the evening of March 12, the Bitcoin market crashed due to the circuit breaker of the three major US stock indexes.
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On the left is the 1-minute chart on March 11, and on the right is the 1-minute chart on March 12, comparing BTC and SP500
The 1-hour K-line chart since mid-February, BTC VS SP500 VS Crude Oil
In the Bitcoin market, we have seen many times that it follows the trend of a certain mature asset for a period of time, such as following gold, or following the RMB exchange rate. Cross market traders will bring these things into the Bitcoin market, and then the market will self-reinforcing this reaction after it works. Then parted ways after a while.
For example, in the first half of last year, as the trade war fermented and the market worried that the economy might fall into recession, Bitcoin quickly climbed to a high level together with gold, but after entering August, Bitcoin quickly lost its correlation with safe-haven assets .
This phenomenon of bitcoin falling together with the stock market and oil prices has also happened in history, and the volume of bitcoin at that time was still very small. The last time we saw crude oil below $30 a barrel was in late 2015 and early 2016, when Saudi Arabia launched a price war against U.S. shale gas fields, and the plunge in crude oil caused the S&P 500 to retreat 15% in a month. %about. Looking back at the price of Bitcoin from mid-December 2015 to mid-January 2016, it was also quite weak, falling from around $460 to above $350, a drop of 25%.image description
Bitcoin December 2015-January 2016 Daily Chart – Tradingview
The above is my explanation, the answer is over.
Kangkang:
Just now Mr. Yansong discussed the recent bitcoin price trend from a macro perspective, and I will analyze it from a more micro perspective.
From the wave of rise at the beginning of this year, it can be found that the final stage is in a state of shrinking and rising, and the rotation of various assets is obvious, indicating that there is a lack of funds in the market.
At 10500, the difference between the highest quarterly delivery futures and the spot is 5%, which is close to 6% of the btc basis at the end of 2017, which shows that there were strong long positions at that time, and the futures and spot markets were under the pressure of basis arbitrage. The lack of late-entry funds led to an overall decline.At present, Bitcoin, as a trading product, is less attractive than traditional trading products. Its volatility is not as high as before, and there is almost no good depth in varieties other than BTC. In the long run, the profit-loss ratio is extremely uneconomical.
At present, BTC is not only unattractive to institutional investors, but also unattractive to retail investors, resulting in a serious shortage of late-entry funds, and then faced the impact of the epidemic, which was greatly affected by the external market, and then fell in response.
Q2: The U.S. stock market was blown twice this week, and the global financial market is bleak. Why can’t Bitcoin be alone?
Rock pine:At the end of October 2019, I wrote an article "Where Bitcoin May Go When the Next Recession Comes", which predicted this outcome: "When the market looks for safe-haven assets, Bitcoin may not An ideal target that remains a highly speculative and liquid asset, the kind of asset that is traditionally the first to sell when the music stops."
As a highly speculative and highly liquid asset, Bitcoin is most suitable as a source of liquidity in times of crisis. So when the crisis comes, its current trend is very reasonable, this is my answer.
Q3: At the beginning of this year, with the US-Iran crisis, Bitcoin and gold rose in tandem. However, in the recent hot financial events, Bitcoin has not followed the linkage with gold. Does it mean that its "safe haven attribute" has expired? Under what circumstances does Bitcoin's "safe haven attribute" work?
Rock pine:
From my point of view, Bitcoin has the attribute of STORE OF VALUE, but it does not have the attribute of hedging, or its hedging attribute is more extreme. . More I will emphasize the effect of cross-market trading behavior on the trend of Bitcoin, that is, it shows a trend similar to gold within a certain period of time, and thus obtains the "risk-aversion attribute".
This situation has been demonstrated during the Sino-US trade war and the US-Iran conflict.During the trade war, traders used fluctuations in the RMB exchange rate and gold prices as signals for trading Bitcoin, giving Bitcoin a trend of rising and falling at the same time.
And more recently, during the US-Iran conflict at the beginning of this year, it was exactly the same, everyone should remember. The following figure shows the delayed response of Bitcoin to the first US missile launch and Iranian retaliation
And on the night President Trump spoke, all the bitcoin traders were staring at him. President Trump concluded his 10-minute speech by saying, “America is ready to embrace peace with all who seek it. Bitcoin fell in response, and that’s what strengthened.Kangkang:
I also think that Bitcoin is not yet considered a safe-haven asset. It can only be regarded as an alternative asset similar to real estate and art. It is more about the confidence and what people think in the trading field.
Q4: There is recent news that the Federal Reserve is about to cut interest rates. How will the global financial market and currency market be affected? If the Saudi crude oil price war ends, will the global financial market and the currency market usher in a recovery?
rock pine
: This problem is still quite big, I will pick up part of it. Bloomberg built a model to determine the odds of a U.S. recession. The indicator predicts that the probability of a recession next year has reached 53%, which is also the highest value since the United States emerged from the financial crisis in June 2009, significantly higher than the previous month's 24%.
At the same time, I think the crude oil price war will reach a stalemate. That market has always required one side to surrender and admit defeat. As for the crude oil price war, the discussion may be more about its impact on the bond market.
According to data from Rystad Energy, only five companies in the United States have a break-even cost lower than the current oil price, and the remaining more than 100 companies cannot achieve profitability at an oil price of US$31. The overall scale of credit bonds in the energy sector was US$857 billion, accounting for 9.6%, of which energy high-yield bonds were US$142.1 billion, accounting for 11.4% of the overall high-yield bonds. If these companies get into trouble and credit conditions tighten, the knock-on effects will be felt around the world.
In addition, interest rate cuts were mentioned in the question. Judging from the tepid reaction of the stock market to the Fed's interest rate cuts in the past few weeks, the situation is not optimistic. I can't directly include the current situation as an "economic crisis", or it happened too fast, which is not the same as the fermentation that lasted for several months in 2008.
For the U.S. stock market, let me directly quote a research from BOCOM International, as follows:
image descriptionS&P 500 Price Chart 2008-Date & 850 Moving Average
According to BOCOM International's research, the 850-day moving average is crucial for US stocks. U.S. stocks tend to find support around this moving average when there is no severe recession. Even the famous "Black Monday" in 1987 couldn't break through. However, when there were severe recessions, such as in 2001 and 2008, the US stock indexes fell sharply below the 850-day moving average. The S&P 500 price is currently hovering around the 850-day moving average.
You can also pay attention to the 850-day moving average to judge whether the current situation will directly enter the economic crisis.
Kangkang:I think what Yansong said is very comprehensive, and there are quite a lot of influencing factors at present. Both sides of this oil price war are also well-prepared for funds, and it is difficult to end it in a short time. At present, the Fed's continuous interest rate cuts are close to the level of 2008.
When the epidemic continues in the future and there are fewer effective means of quantitative easing, it will be quite scary. Because Europe is also in an era of negative interest rates at present, and there are not many macro measures. As for the financial crisis, it may also be a long time.
Q5: If the epidemic ends in the first half of this year, how likely is it that the currency market will recover in the second half of the year?Rock pine:
After the halving in May, miners have to clear out, which is good for the currency price. It's just that market confidence needs to be restored. Many people who left this market yesterday will not come back. Practitioners really still have expectations for it. It may not be expected to be 20K, but they will not be too pessimistic.
Q6: Under the current market conditions, are other mainstream currencies and altcoins out of the independent market? Teachers, please focus on analyzing the trend of "Halved Three Idiots" in the next few months.
Kangkang:First of all, my point of view is that the current halving of the mainstream currency market has come to an end. From yesterday to today (Friday), Bitcoin has fallen by more than 50%, and most mainstream currencies have hit new lows since the second half of 19 years.
From a fundamental point of view, the fundamentals of several halved mainstream currencies have not improved significantly in the past few years. Whether it is from Dapp, usage, or technological innovation, it is not much different from a few years ago.
From a technical point of view, the decline has completely broken, and it is very difficult to break through to a new high. Halving is currently one of the hype concepts of relatively large mainstream currencies in the next few years. After the concept of halving has been hyped, there are few concepts to hype in the future, and the market outlook is not very optimistic.Rock pine:
The capital hype has come to an end, and the halving of small currencies is over.
Q7: As the king of public chains, does Ethereum have a chance to rise this year?
Kangkang:
At present, the overall market is in a downward state, including Bitcoin falling 50% in two days, and Ethereum has not been able to survive alone, and it has even retreated from the high point by up to 70%. Recently, it is also facing the liquidation of this DEFI mortgage loan. So it led to the rapid decline of ETH. The recent decline is a state of making up for the decline, and the decline in these two days is generally greater than that of other mainstream currencies.I think there is still potential in the future. At present, the CFTC US Commodity Futures Trading Commission has recognized ETH as a commodity, and has the opportunity to launch CME, CBOE and other mainstream currency derivatives trading platforms like BTC in 2017. At that time, ETH will be known to more people.
No matter in terms of popularity or liquidity, there will be a great improvement, and the more important thing is the change of the valuation model. The value will be converted into some storage value, so that the market value will get some value improvement. Because in the past, ETH was often used as a public chain to use gas fees or usage for valuation.
Q8: Is the platform currency that was popular last year worth investing in this year? Teachers, please focus on analyzing the three major platform currencies.
Kangkang:
Under the weak market, the platform currency has also become tasteless. At present, including mining machine manufacturers, mining farms, exchanges and media, all future expectations mainly come from the price of BTC. However, if the price of BTC has shrunk severely, the overall market will deteriorate. Without the desire to trade, the income of the exchange will be significantly reduced.
Moreover, the platform currency faces relatively high policy risks. If it is subject to regulation, the platform currency will be regulated by relevant securities laws and regulations. In addition, the overall encryption market is in a downward stage. Short-term investment in platform currency may not be a good strategy.However, in the next few years, the main field of the blockchain industry will still come from transactions, and it will become more and more specialized. Therefore, there is a high probability that the top exchanges will have good cash flow and profitability in the future.
This picture is the comparison of platform currency and mainstream public chain and BTC income I calculated at the end of 2019:
Generally speaking, in 2019 and with the rise of IEO, when the market comes, the income of the platform currency is still considerable
Rock pine:
This is the return rate of the platform currency in 19 years:
From past experience, platform currency is the most stable source of profit in the market. We can even calculate a reasonable platform currency price range through traditional financial models such as DCF.The price of the platform currency is directly linked to the company's income and repurchase ratio. The top exchange is the core of the industry and the place with the largest relative profit.
I think you can try to do some model calculations on the three platform coins based on your own forecasts for the future growth of the industry, and buy them below the valuation range you gave. Too many people have missed the OKB worth less than $1.
Q9: This downward adjustment has also exacerbated the panic among investors. Is the "halving market" over, and can Bitcoin continue to rise? Which points can investors pay close attention to?
Kangkang:
First of all, let me show my point of view, I think the halving market is over. As for BTC in the future, will it rise? I think Bitcoin will enter a long period of low volatility.
In fact, the halving market actually has two points. One is the increase in the cost of miners, which will lead to higher mining costs. The second point is people's expectations.
When people expect that the halving will have a relatively high increase, when the market goes in the opposite direction, whether it is the block reward halving or contrary to people's expectations, the currency price will quickly move in the opposite direction.
Regarding the market, the one that may be closest to us is the "mine disaster". At present, most mines hold BTC. When the mining machine is shut down, it may mean that some mines with poor cash flow will face liquidation, and some mines increase leverage through mortgage loans or off-site loans, which aggravates The selling pressure of BTC spot has been suppressed, because the liquidation of mine farms will take a certain amount of time, the situation in the near future may be that BTC spot will be under huge pressure, and the price of Bitcoin will slowly fall, and the decline of Bitcoin price will lead to more mines. The market is facing liquidation, and after more mines are facing liquidation, the price of BTC is under pressure again, thus forming an endless loop.
The liquidation of the mine also means a decrease in computing power, a decrease in the difficulty of mining Bitcoin, and a decrease in the unit cost of mining Bitcoin, until the mine with capital reserves and low energy consumption ratio of mining machines survives the downturn in currency prices and Gradually making profits may mean the end of this "mine disaster"
As for low volatility, there are mainly three aspects. The first point is that the current short-term and long-term investment logic of Bitcoin has been broken. The short-term investment logic is the halving of Bitcoin. The attribute of halving is not only a factor that helps Bitcoin rise, but also that the price of Bitcoin has entered an "infinite loop." meat grinder.
Another long-term investment logic is its "risk-aversion attribute", which is one of the most important attributes supporting the future value of Bitcoin, but we can see from the recent trend of it and traditional financial assets that the "risk-aversion attribute" is completely missing For the time being, it can only be classified as an alternative asset related to real estate, art, and private equity investment.
The second point is that Bitcoin is unattractive. The first is the ability to tell stories. We found that the technological progress in the blockchain field has been slow in recent years. Although new terms have emerged in an endless stream, there is not much difference from the previous two years. At present, the volatility of the bitcoin market is decreasing year by year, and the depth is insufficient. Compared with other financial assets, the profit-loss ratio is obviously not cost-effective, and there is no safe deposit channel. Most of them are on the edge of gray, so institutions and retail investors rarely have funds to enter the market. It can improve the channels for BTC funds to enter the market, such as the adoption of ETF index funds, or promote the price of Bitcoin.
The third point is on the technical side. At present, BTC has broken the position, breaking below the bottom platform of $6,500 built at the end of 2019 and the beginning of 20. This position will become a strong resistance level.From a technical point of view, it will take about half a year to be optimistic, and even a few years to be pessimistic, and even to go out of the long-term downward trend.
So to sum up, the overall supply and demand of Bitcoin will tend to balance after a period of time. Without a good improvement in capital and fundamentals (currently, there is no potential for a relatively large improvement in the next few years), the price is very low. It is difficult to have relatively large fluctuations, but as a Bitcoin trader, there is no need to be overly pessimistic. Bitcoin is currently considered a commodity with a large market value, and its value is recognized by some people. In the long run, it will exist as a trading product for a long time , As for whether the recent "mining disaster" will intensify, further observation is needed.
Regarding the specific point, you can pay close attention to 3100 US dollars at present, which is the starting point of the market in the first half of 2019 and has relatively strong support. At the top, you can pay attention to 6400 US dollars, which has relatively strong pressure.
Rock pine:
The chart below shows the possible trend of US stocks. The SP500 rebounded after falling to 2400 on Friday morning. Since Bitcoin may still follow the U.S. stock market in the short term, we can continue to pay attention to the K-line of this U.S. stock market.
However, according to past experience, this highly correlated trend will come to an end at a certain point. For example, Trump's speech during the US-Iran conflict was the last signal.
So you can continue to observe for a few more days to see if yesterday's decline has ended the recent trend of convergence with US stocks.
If you confirm this decoupling, then Bitcoin is back in an independent trend, then the total use of technical analysis may only be reflected.
In the medium term, many points will conflict.First of all, I am inclined to clear the miners after halving, which is good for the currency price. But we have not seen the V-shaped bottom of Bitcoin before, they are all arc bottoms. Therefore, the process of turning from a bear to a bull may last as long as before, killing the patience of the participants.
I think it may not be very useful to talk about technical aspects now. You can consider exchanging time for space through scheduled investment. For example, if you buy in stages from 5000, 4500 to 3000, you need to plan the principal invested and the percentage invested at each price.
Q10: If there is a next round of bull market, what will be the tipping point? In the next round of bull market, will Bitcoin repeat the blood-sucking market of 2019?
Kangkang:
If there is a next round of bull market, I think the tipping point is the improvement of deposit channels.
At present, the blockchain technology has not developed very well, and the tipping point of the market is more from the capital side. At present, the number of new retail investors is getting smaller and smaller. If there is a relatively large amount of capital entering in the future, it mainly depends on the situation of the institution. , such as safe custody, liquidation, etc., and the approval of ETF index funds, these may be the tipping points that cause the next round of bull market.
I think that if BTC can undergo qualitative changes in the future, it may be an ETF, referring to gold around 2003. Before 2003, gold also experienced a period of low volatility for nearly 10 years. After 2003, the international economy and politics were unstable. The approval of ETF allowed gold to demonstrate its safe-haven properties.blogAs for whether Bitcoin will repeat the blood-sucking market of 19 years in 20 years, I think it mainly depends on the market situation. Generally, there are two situations in which the proportion of btc's market value increases, one is the initial stage of the rising market and the panic period of the bear market. Therefore, it is roughly judged that this year as a whole is a period of bottoming in a bear market, and the market sentiment has deteriorated. There is a high probability that more funds will flow into BTC, but the price of BTC may not rise sharply, and it is more of an emotional panic.
Yan Song: I agree with Kangkang’s statement that ETF may be a tipping point, although there is still no sign of persuading the regulator in the short term.
I may be more optimistic about blockchain technology than Kangkang. I think the potential of blockchain is still very large. It is difficult to predict what will come out, but it may be amazing.I am in myself in February
wrote: "Tokenize has always been a direction that I pay attention to. The reason why I pay attention to this direction is more because of 'equal rights'. From my point of view, the threshold of 'Accredited Investor-Qualified Investor' makes a lot of assets with better appreciation space. It does not belong to the people. From my point of view, this smaller value share-based ownership is a potential direction on the blockchain.”
Q11: The market has fluctuated sharply recently, and some contract users have suffered heavy losses. I would like to ask the two teachers, what kind of investor is the contract suitable for? What should be the correct positioning of investors for cryptocurrencies such as Bitcoin?
Kangkang:
First of all, I think contracts are more suitable for professional individual investors and professional institutions.
In the bull market of A-shares in 2015, retail investors accounted for 3/4 of the total funds, while profitable funds accounted for 1/4, while institutions accounted for 1/4 of the total funds but accounted for 3/4 of the total profits (the 28th law, even in reality Among them, the proportion of retail investors in US stocks is only 6%.
The current currency circle is similar to the early A-share market. At present, the proportion of retail investors is relatively high. The high probability of increasing leverage can only magnify the losses of individual investors, and whether leveraged investment is low leverage or high leverage, the management of positions, The control of points, as well as the control of stop profit and stop loss are very strict.
Therefore, futures requires a very high degree of professionalism, because people will always make mistakes in their judgment. While there are many bulls and shorts in the same direction, there must also be hedging positions. This requires a very good understanding of the market, such as the transactions of various exchanges. Variety and trading depth, whether to hedge between spot and futures, between futures and options, or between different pairs of trading varieties, etc.Leverage can not only magnify profits, but also magnify mistakes. In the secondary market, there is often a survivor bias, which is what you see when you play futures with a net worth of over 10 million or even 100 million. For example: if your probability of winning is 1/2 every time, and you win 10 times in a row, 1 person in 1000 people will win 10 times in a row).
If there is no scientific method and risk control system, the final fate of most people is to return to zero.
Therefore, futures are more suitable for professional people, such as professional institutions and individual investors. They have enough energy and experience to delve into the market, and as people in the industry, their information acquisition is faster and more accurate than most individual investors. , Bitcoin spot is very suitable for most individual investors as a long-term asset allocation (such as allocation between real estate, stocks, and bonds).
Rock pine:
