Analysis of the currency market in 2021: the number and magnitude of callbacks are critical
Yesterday we analyzed that the development of this round of market is likely to be led by Bitcoin, so we should focus on the trend of Bitcoin.
There are two trends in Bitcoin: one is the "urgent bull" that comes and goes quickly, and the other is the "slow bull" that comes and goes slowly. Among these two trends, Slow Bull is healthy and long-lasting, and it is also the trend we look forward to.
The most important thing to get out of the slow bull is that the market must have a sufficient range and sufficient number of callbacks.
Let's take history as a mirror and review the trend of Bitcoin in the last round of bull market.
The picture above is a chart of Bitcoin from 2013 to January 2018, which covers the peaks of the previous two bull markets.
On December 4, 2013, Bitcoin reached the peak of an earlier bull market at $1,117. Three years later, on January 5, 2017, Bitcoin surpassed the peak of the previous bull market and reached $1,126. It opened up the upside and walked out of a one-year bull market. In this bull market, Bitcoin reached a peak of $19,244 on December 18, 2017, an increase of about 17 times.
Looking at the current market based on this rule, Bitcoin officially broke through the peak of the previous round of bull market in December last year, completely opened up the upside space, and began to enter a new round of bull market. So we're definitely in a bull market right now, but clearly in the early stages of a bull market.
In the picture above, I marked several trends with small horizontal lines. These movements are basically more than 20% of the correction. In other words, in the last bull market that lasted for a year, Bitcoin experienced at least 5 corrections of more than 20% before reaching its peak.
The callback in the bull market is very necessary for the healthy and sustainable development of the bull market. On the one hand, it consolidates and summarizes the trend of the previous stage, and on the other hand, it also accumulates strength and lays the foundation for the continued development of the next stage.
This callback is to continuously consolidate the foundation of the bull market and strengthen the upward trend of the market. Therefore, in a bull market, the more times and deeper the corrections are, the stronger the foundation of the bull market will be. To change the "bull trend", it will be more difficult to suppress the "bull market", and the longer the bull market will last.
Therefore, as investors, we should not only not be afraid of callbacks, but also get used to and like callbacks.
In the above figure, we can also find that in June 2017, Bitcoin experienced a longer and deeper adjustment, and before June, there were two more adjustments. Without such a major adjustment, it would be impossible for Bitcoin to get out of such a strong market in the second half of 2017.
I believe this rule also applies to this market.
In the last round of the market, Bitcoin rose from a breakthrough of 1126 US dollars to a maximum of 19244 US dollars, an increase of 17 times, and it took 1 year. On the one hand, the achievement of this achievement is due to the huge contribution of Ethereum ICO, and on the other hand, it is inseparable from this healthy callback.
This round of market, without the stimulation of ICO, can only rely on the trend of Bitcoin itself to drive the development of the market. Therefore, whether the callback is sufficient and has a magnitude is even more important.
As for whether the callback is sufficient and substantial, in my opinion, the key lies in the first half of the year, which is why I wrote in yesterday's article that the key to the trend of Bitcoin in this round of market is the first half of the year.
If in the first half of the year there were not at least two small-level corrections and one large-level correction, but a straight-line rise like a mad bull, then I am afraid that this round of market prices will not last long, and the price that Bitcoin can reach is relatively limited-- - Up to $50,000 to $60,000. If there is a sufficient depth and number of corrections in the first half of the year, then this round of the market will be very promising, and it is entirely possible to go out of the market that lasts for a year or even longer, and the price that Bitcoin can reach may reach or even exceed 100,000 US dollars.
Based on this speculation, no matter whether the current round of market is "urgent bull" or "slow bull", at least in the first half of the year we don't have to worry too much about the market trend, as long as we pay close attention to it, hold the coins in our hands and don't sell them casually.
Here I would like to remind investors of two very taboo behaviors in the bull market:
One is that investors who have coins in their hands should not see that the market has risen well for a period of time, guess randomly that there will be a callback, and then sell the coins in their hands smartly, dreaming of a callback, and then take back the chips at a low price. Nine out of ten ideas of this kind will fail, and it will only cause us to lose precious chips in our hands and miss the bigger market in the future---picking sesame seeds and losing watermelon.
The second is not to see that the market has been rising or falling for a period of time, thinking that it has already reached a certain level, and thinking that the market will reverse immediately, and then use leverage and futures. This kind of thinking is the main reason for death in a bull market. reason.
