BTC returns above 50,000, is this the bull's turn or the last train of the bull market?
Bitcoin regained $50,000 yesterday, showing a relatively strong performance, recovering half of the increase from $58,000 to $43,000. Bitcoin returned above $50,000, recovered the 10-day moving average, and returned to the original upward trend.
BTC has returned to above 50,000. Is this the bull's turn or the last train of the bull market? It is necessary to figure out the main reason for the sharp drop in Bitcoin this time. The logic behind this market crash is sorted out below.
In the last week of February 2021, the digital currency market ushered in a flash crash after the new year’s boom. The highest number of people liquidated in one day exceeded 500,000, and the amount of liquidation exceeded 30 billion yuan. ".
The reason for the plunge is the external economic environment. The interest rate of the 10-year Treasury bond in the United States has soared, causing investors to worry about tightening interest rates. Because the United States is the largest supplier of liquidity in the world, this panic has also spread to the world. Risk assets and safe-haven assets fell together, which seems to have reproduced the liquidity crisis last year.
The phenomenon of linkage with the traditional financial market many times has also made the relationship between the currency market and traditional finance more and more close. It can be said that as an alternative investment market, the digital currency market has been deeply integrated into traditional finance, and exists as part of a phenomenon that affects the whole body.
It is undeniable that the international economic environment has also become the key to the future development of the digital currency market. Only when Bitcoin is good, other currencies will be good. This is still the cruelest fact.
Well, now that we understand the main reason for this BTC crash, it is not difficult to get the answer to the question. In addition, this point can also be explained in the market, Bitcoin is still a bull market, and the decline is a normal "bull turning back". Next, let's start with the market to see if Bitcoin is turning around.
First of all, we can see from the figure below that in the past two months, BTC has gone through a wave of higher prices. Of course, this is also a typical bull market. It is worth noting that the low point of this market decline has not yet fallen below the high point of the previous wave of market rise, which shows that the bull market has not yet ended, and the key support level of 42500 is still valid, and then the market will start to rebound.
Secondly, we zoom in on the 4h level chart in the above picture to the recent market for the convenience of technical analysis.
We can see from the above figure that since the market fell below the 4h-level MA60 last week, the market has tried to rebound many times, but all failed when it touched the MA60 average. It can be seen that the suppressing force of the MA60 is still very strong. After several days of oscillating at the bottom, the market also ushered in a super rebound yesterday, breaking through the strong MA60 moving average in one fell swoop, and then the currency price continued to rise, reaching the highest around 52600.
What I want to say here is that only in the short-term period, the 4h-level MA60 moving average can temporarily serve as a watershed between long and short. As long as it does not fall below, you can still continue to be bullish. If it falls below, you need to wait and see or bearish, waiting for a clear market signal Act again.
