The hot market returns to tranquility, where does the calm currency circle go?
Market review:
Market review:
In the past two days, the bitcoin market has experienced a sharp decline. It fell by $10,000 in one day, the largest single-day drop in Bitcoin history. It fell from a high of $58,000 to a low of $46,000 in two days. Then yesterday started to rebound and repair the market, the highest rebounded to the 51350 line, and then today the overall market volatility is small, the overall shock is in the range of 50000-51000 line, and the shock consolidation is looking for direction.
Analysis of mainstream currency market:
After Bitcoin experienced a drop of 10,000 points in the previous day, the market has returned to volatility, and the market has returned to calmness. The overall fluctuation range is around 2,000 points. At present, after the previous madness in the market, people have begun to think calmly. Supporters from both long and short sides No one has a decisive advantage to attack the other party, so in this case, we can foresee that the next market will not fluctuate too much in a short period of time, at best, it will fluctuate around 2000-3000 points Yes, no matter whether the bull market continues to break out or the bear market starts, it is necessary to eliminate the impact of the previous market's sharp rise and fall through shocks. Therefore, in this case, we only need to follow the general trend of the market in operation, and suppress the 51500 line near the top of the short-term operation You can place empty orders, the lower 50,000 integer mark is used as the first support, it is completely possible to enter the market with light storage and place long orders, the lower 48,000 line is used as the second support, the vegas tunnel large-cycle support is 47,000-45,800 as the ultimate support, and other mainstream currencies are roughly The operation ideas are the same, and shocks are treated,
2. 170-175 enters the market with multiple orders, default stop loss, target 1850-190
Seek new directions through the market and provide inspiration for follow-up operations
As we all know, Bitcoin has been in a brainless upward trend from the second half of last year to now, and the market is unanimously bullish. The greed sentiment index has occupied the high level above 90 for a long time. After last year's 3.12, the lowest was 3000+ and this year's highest was 58300. As high as about 1910%, it has to be said that it is so crazy. Among them, Tesla, Grayscale and other large foreign institutions and consortiums have contributed a lot, but prosperity must decline. This eternal truth has been verified again. The two days yesterday yesterday The day's drop also staggered the unstoppable rise, setting the largest drop in history on that day, with a drop of up to 20%. The price also fell directly from 58,000 to the lowest line of 46,000, with a drop of up to 12,000 points, and then continued to fluctuate at 51,000 In the range of -50000, the rebound is weak, and the overall fluctuation range is about 2000 points. Let us have a good rest and have time to quietly think about how the next road will go. The greed index reflecting market buying sentiment is also from the long-term 90+ fell to around 75, it seems that the whole market has returned to calm from the previous hotness, and no longer went back to the previous crazy buying.
Although Bitcoin has experienced such a large decline in the short term, I think the bull market of Bitcoin will continue. Both short-term and long-term factors that lead to the rise of Bitcoin prices continue to exist. Therefore, the current decline is a short-term adjustment and will not This is the beginning of a Bitcoin bear market.
The market has full expectations for the resulting inflation and the depreciation of the dollar, and is also taking corresponding measures to hedge this risk. Assets that are considered scarce in the market are therefore further sought after. Good real estate, good stocks and Bitcoin are all attracting a lot of money.
In terms of short-term factors, some predictable events this year are positive factors for Bitcoin. First up is Coinbase's upcoming listing. In the current private placement market, the market value of Coinbase has been rising. It is currently valued at $100 billion. If listed at this market price, Coinbase will be the second largest company by market value at the time of listing after Facebook.
Positive for Bitcoin The second near-term factor is the filing of Bitcoin-based ETFs.
At least VanEck, Morgan Stanley and NYDIG have filed applications to set up Bitcoin ETFs. These applications now have a higher chance of approval than before. Among the reasons for the SEC’s rejection of the establishment of a Bitcoin ETF in recent times, the lack of a suitable custody mechanism and the inability to rule out market price manipulation factors are the main reasons for the SEC’s refusal to approve the establishment of a Bitcoin ETF. But today, Bitcoin’s escrow mechanism has improved dramatically. In particular, the U.S. Office of the Comptroller of the Currency has clarified in 2020 that the Federal Bank of the United States can provide custody services for encrypted digital currencies, so the custody mechanism for Bitcoin has already begun to improve. In terms of price manipulation in the Bitcoin market, this factor will always be present. Even on regular stock exchanges, market price manipulation occurs from time to time. Therefore, for regulators, cracking down on market price manipulation is a persistent job. Therefore, it is not entirely based on this reason to reject the application of Bitcoin ETF. Gensler, who is about to serve as the chairman of the SEC, is in favor of Bitcoin, which is completely different from the basic position of the previous SEC chairman. Therefore, the chances of the SEC approving the establishment of a Bitcoin-based ETF are even greater
Finally, considering the reality, Bitcoin has now begun to circulate and trade in the US market.
Retail customers can buy and sell bitcoin through companies like Coinbase, PayPal, and Square. Institutional clients can also buy and sell bitcoin through institutional products like Coinbase and Grayscale Bitcoin Trust. Therefore, not approving the establishment of a Bitcoin ETF will not protect American investors from losses caused by market price manipulation. From the perspective of the international situation, the Bitcoin-based ETP in Europe and the Bitcoin-based ETF in Canada are both welcomed by the market. This will affect the establishment of ETFs approved by the US SEC.
What is the reason for the sudden burst of confidence among buyers in the near future, which keeps pushing up the price of Bitcoin?
First, Wall Street venture capital and hedge funds first, and then traditional financial institutions and high-tech companies entered the market with large funds. Grayscale Capital, Tesla, MasterCard, and Bank of New York Mellon have successively entered Bitcoin, which undoubtedly boosted public confidence.
Second, the extremely loose monetary and fiscal policies of countries around the world, especially the United States, have caused hot money and hot money to flow around, looking for targets for speculation. The uncertain valuation and scarcity of Bitcoin have attracted a large amount of speculative capital.
Third, the U.S. dollar in the digital currency world: USDT large-scale excess issuance. Imagine that if the Federal Reserve suddenly issued five times more dollars within a year, in theory, the prices of all assets denominated in dollars in the world would increase by five times. USDT, as the US dollar in the digital currency world, issued 4 billion US dollars at the beginning of 2020. Only one year later, the circulation is conservatively estimated to have reached 20 billion US dollars, so it is not surprising that the price of Bitcoin has increased by 5 times.
Fourth, digital currency exchanges have launched derivatives, allowing users to use large-scale leverage with high multiples, which has contributed to the skyrocketing and plummeting of Bitcoin prices.
