In December 2020, amidst the controversy over value confirmation and bubble doubts, BTC broke through its historical high and climbed to a new high of $20,000 after experiencing a journey from $19,000 to $3,000.

In January 2021, BTC surpassed its previous high by 2 times, and after reaching $42,000, it pulled back to around $30,000.

In February 2021, facing the unbelievable eyes of the whole world, BTC once again broke through $42,000, $50,000, $55,000, and $57,000...

On February 21, 2021, on the way to hit $58,000, BTC encountered resistance and fell to around $55,000.

Here comes the question, is it a small callback? Or is BTC peaking, can such a high BTC still be bought?

first level title

Volume Implications

transaction amount

transaction amount

When it comes to trading volume, the most intuitive thing is to observe the K-line chart. This is the time-line chart of BTC. It can be seen that at 6:00 this morning, BTC dropped the most, and at this time a relatively higher trading volume was generated.

Of course, strictly speaking, the K-line chart shows the transaction volume rather than the transaction volume, which is measured in currency.

The price is falling, but the transaction volume has increased instead, indicating that relatively more funds are buying BTC, which has hindered the decline of BTC as a result.

When it fell, a lot of funds still bought BTC, which reflected the market's confidence in BTC.

Let’s take a look at some other mainstream currencies, this is ETH:

Here is the DOT:

Here is BNB:

Several mainstream currencies also generated large transaction volumes when they fell. It shows that investors still have confidence in the currency and the currency market.

In fact, novice leeks often have FOMO psychology when they are at a high level, while veteran leeks often like to wait for periodic callbacks and wait for opportunities to buy into the car.

secondary title

transaction frequency

Little Bee hasn't counted this indicator for a long time. Little Bee has established an indicator - the ratio of trading volume to market value, which can reflect the trading frequency by dividing the daily trading volume by the market value.

This indicator, first of all, can eliminate the impact of price fluctuations on trading volume. After all, the price fluctuations of BTC are not small every day.

Second, the impact of price levels can be eliminated. On different dates, because BTC is not at the same price level at all, the so-called transaction volume (actually transaction amount) does not truly reflect the transaction volume of BTC.

Second, the impact of additional issuance of BTC can be eliminated. After all, there will be a certain amount of new BTC output every day. At present, about 900 new BTCs are produced every day.

Look at the chart compiled by the little bee:

In March 2020, the price of BTC fell and the frequency of transactions surged, reflecting the panic in the market. On the one hand, a large number of BTCs were sold, and on the other hand, a large number of BTCs were bought.

In September 2020, BTC once hit $12,000, and immediately stood above $12,000 and fell back sharply. At that time, it was Defi coins such as SUSHI that rose wildly, while mainstream coins such as BTC performed relatively mediocre. At that time, the trading volume also rose, and there was also a market panic, a large number of selling and buying.

In January 2021, BT once pulled back, and there was also a relatively high transaction frequency here. However, this transaction frequency is still very low compared to the previous two. So soon, after half a month of callback, BTC continued its upward trend.

In fact, in December 2017, BTC also had a similar form.

However, looking at BTC at this stage, there is no significant increase in transaction frequency at all, but the transaction frequency has declined in recent days. However, the price of BTC has been rising these days.

This shows that the buying power is more dominant, while the selling power is not much. Holders of BTC still have higher expectations.

To see it more clearly, look at the chart from 2021:

In recent days, BTC has been rising, while the frequency of transactions has been declining.

secondary title

golden revelation

At present, there is an interesting phenomenon that many cryptocurrencies such as BTC are rising, but the price of gold is falling. This is a bit puzzling.

Because one of the reasons for the rise of BTC is the inflation caused by the continuous release of water in mainstream countries such as Europe and the United States.

But if inflation triggers BTC to rise, there is no reason for gold to fall.

Then the little bee took a look at the trend of gold:

Gold began to rise around March 2020 and continued to rise until early August, with a rising cycle of nearly five months.

Although BTC is also rising at the same time. However, BTC also plummeted in March, while gold did not fall so sharply. Therefore, the period from March to August is the time for gold to rise, but it is the time for BTC to recover.

The real rise of BTC began in October, and it rose slowly from October to December, and it has only risen rapidly since December, and there has been a half-month correction during this period.

The revelation of gold to BTC is:

First, in the environment of great inflation, the reason why gold rises first and then falls is because the price of gold would have risen under inflation, but this has affected expectations and accelerated the rise of gold, thus forming an expected bubble, and after the bubble a certain degree of decline.

Second, gold has risen for 5 months, while BTC has only risen for 4 months.

Third, BTC is different from gold. The rise of gold is more due to inflation and market expectations for inflation. There are two fundamental reasons for the rise of BTC, one is inflation, and the other is the consensus of BTC's 4-year cycle, and the BTC consensus bull market in 2021. Of course, on top of these two factors, there will be bigger bubbles, respectively.

secondary title

institutional inspiration

Why did Tesla buy BTC? Does Tesla want to speculate in coins? Why does Grayscale buy coins, because do Grayscale retail investors and institutions want to speculate in coins?

It cannot be denied that all people and institutions are profit-seeking.

However, the purchase of BTC by these institutions has once again confirmed the two fundamental reasons for the rise of BTC mentioned above by the little bee, one is inflation, and the other is the consensus of BTC.

Institutions buy BTC to avoid risks, and at the same time join the BTC consensus camp.

Here are the listed companies currently holding BTC:

write at the end

write at the end

The enlightenment of the trading volume is that the transaction volume rises instead of the currency price falling, and there are a lot of funds to buy at the low point; the price is rising, while the transaction frequency (trading volume/market value) is declining, indicating that the consensus between the long and short sides is declining, and buying The power of entry is dominant, while the power of selling is getting weaker and weaker, indicating that market expectations have not peaked.

The revelation of gold is that the reasons for the rise of BTC and gold are not exactly the same. In addition to inflation, there is also the consensus drive of BTC itself. While gold continued to rise for 5 months, BTC rose for at most 4 months.

The revelation of the institution is that BTC avoids inflation and the value consensus has been recognized by some institutions.

So, at the high level of the BTC space, do you think BTC can still be bought?

Finally, a reminder of the risks. This morning, BTC saw some pullbacks, falling above $45,000. Generally, the decline may not be just a wave. Looking at the K-line of BTC and other currencies in the previous screenshot, there is a slight recovery after the callback, but the trading volume when the recovery is not large, and the current pull-up force is not too strong. In addition to BTC, if other coins pull back with BTC, their decline will be even greater.

For New Leek, if there is a drop after getting in the car, you don’t need to be too afraid. If you don’t have confidence in BTC, then you should follow William’s advice and don’t buy BTC.