Analysis of the currency market in 2021: Bitcoin trend is the key

Since December last year, the rapid rise of Bitcoin has completely aroused the emotions of insiders and the attention of outsiders. Bitcoin hit new highs continuously, from breaking through $19,000 until it rose to $34,000 yesterday. During this sharp rise, it has hardly encountered any obstacles and callbacks.

The rise of Bitcoin does not seem to have a big impact on other digital currencies. For example, although Ethereum is also rising, it has been rising moderately. When everyone's attention was focused on Bitcoin, from the night before yesterday to yesterday, Ethereum suddenly started a wave of skyrocketing, rising to a maximum of $1,100 in one day.

The skyrocketing price of Ethereum further fueled the excitement of the bull market, making almost everyone continue to look forward to the next market. But at this moment, since yesterday afternoon, Bitcoin suddenly made a big reversal, falling from a maximum of 34,000 US dollars to a minimum of 28,000 US dollars.

This unprepared big reversal caused the entire network to blow up 10 billion yuan of funds, and more than 100,000 people were damaged.

So some people began to wonder whether the market will end next? Some people are even more worried about whether the currency price has reached a high point, and it is time to sell it?

In my opinion, the current market is still only the early stage of the bull market, and we don't even think about selling coins at this time.

The next trend of this round of market is a topic of great concern to all investors, but we are not prophets, and it is impossible to predict the market with 100% accuracy. However, based on past historical experience and the laws of other investment markets, it is still possible to make a rough judgment on the trend of this round of market.

Generally speaking, there are two ways to move in the bull market: one is rapid rise and fall, and the bull market comes and goes quickly; the other is staggered ups and downs, gradually raising the basis of the market, and slowly reaching the peak of the bull market.

The stock market in our country in 2015 was a typical example of the first type. In that wave of bull market, according to my original estimation, the market may continue to rise after 5100 points, reaching 6000 points or even higher. , As a result, the development of the market was out of control, and the bull market was abruptly terminated.

This kind of trend is something that all investors do not want to see. For the hard-won bull market, we all hope that it will come out of a healthy slow bull market, so that everyone can earn profits steadily.

In order to get out of a healthy slow bull, the most important thing is that the development of the market must have a moderate and appropriate amount of callbacks. This is the second method mentioned above.

The previous bull markets of digital currencies were basically the second method, and led by Bitcoin, the bull market lasted for about a year. Will the entire digital currency market in this round of market also go out of the ups and downs under the leadership of Bitcoin, which lasts for a year? Then look at two points:

1. Is Bitcoin still the vane of the entire market this year?

2. The magnitude and number of Bitcoin callbacks this year.

So far, the development of this round of market has been vigorously promoted by institutions, and the focus of institutional buying so far is mainly Bitcoin. I think that next, the main target of institutional buying will be Bitcoin. Institutions may buy Ethereum or even other currencies, but those may not be the focus of institutional buying in this round of market.

Why? Therefore, the factors that institutions will definitely consider when purchasing varieties are: safety and liquidity. The security of digital currency is mainly reflected in whether it will be affected by regulation, whether there is a strong consensus, and whether the digital currency itself is technically mature. The liquidity of digital currency is mainly reflected in whether the volume is large enough, whether buying and selling are efficient and convenient.

Considering these two points, the most suitable targets are only Bitcoin and Ethereum. And Ethereum is now transitioning to 2.0, and there are technical uncertainties in this process. In my opinion, this will be one of the key points for institutions to consider. Therefore, relative to Bitcoin, Ethereum still has certain uncertainties to some extent, so the focus of institutional attention will still be Bitcoin.

The promoters of this round of market are institutions, and the focus of institutions is Bitcoin, so Bitcoin will still be the leader of this round of market. So how this round of market will go, we will pay close attention to how Bitcoin will go next.

In my opinion, the key to the trend of Bitcoin is in the first half of the year.

If Bitcoin continued to rise almost all the way in the first half of the year, it is very likely that this round of bull market will be a round of "urgent bulls". This kind of market comes and goes quickly. In this kind of market, the vast majority of investors who are short-sighted in the early stage are either afraid to get in the car because of the skyrocketing price, or they become takers in the final stage because of FOMO sentiment; and investors who hoard coins will also be very anxious. If you want to sell, you are afraid that you will sell it too early, if you don’t sell it, you are afraid that the bear market will come soon, and you will miss the best price for selling.

If there are several relatively healthy or even deep (10% to 20% or even more significant) corrections in Bitcoin in the first half of the year, then this round of bull market is likely to be a slow bull, at least the market can last until the second half of the year, and there is a high probability of going down A year-long bull market. This kind of market is the most favorable market for investors who are hoarding coins, and it can also give some opportunities to get in the car for investors who are short-lived early.

So will this round of market be "urgent bull" or "slow bull"? What price is the price of Bitcoin likely to reach next? I will continue to share with you tomorrow.