Fireworks Essay: What signal does Bitcoin pull to below its previous high and then fall back again?
After Bitcoin fell from its historical peak of $58,000 on February 22, and the entire cryptocurrency market plummeted for two weeks, Bitcoin finally rose to $58,000 for a short time. Although it did not break through the previous high, it fell back again, but The first signal is also regarded as the clarion call for the multi-army to sprint again. The market downturn appears to be continuing despite increased demand and increased confidence among retail and institutional investors in the cryptocurrency market. The best explanation is that there is no effective breakthrough to new highs.
Why can't Bitcoin break through the previous high? Xinhuo believes that market sentiment is dominant. The crypto bull run from the first quarter of 2020 to the first two months of 2021 has brought many new investors to the cryptocurrency market. Some investors are drawn to this nascent investment market because it offers unusually high returns compared to traditional investments such as stocks, commodities, and bonds, but these investors are not used to the high volatility of the cryptocurrency market and are new to trading. generally performed poorly. Because of this, when the price of Bitcoin reached $44,000, there was a massive sell-off in the Bitcoin market, as evidenced by Coinbase’s outflow data. Many new investors are intimidated by the volatility, and we often see this type of panic selling when prices correct quickly. During a period when the price of Bitcoin continues to rise and correct, we can see buyers with weak pockets being struck out.
Investment returns in the futures market measure the flow of money into the market. The 20% drop in the investment index illustrates the negative sentiment that has crept into the market due to falling prices. It’s also important to note that the market has risen to all-time highs much faster than many in the community expected. Therefore, at present, it seems that the correction of the currency price is expected, and it is a healthy correction.
Friends who are familiar with Xinhuo know that Xinhuo is extremely fanatical in collecting news and data in the currency circle, and many of the data show that whether the decline is a sell-off by small-capital speculators or just a callback after the market peaked in early February , apparently, institutions are not intimidated by this volatility. They seem to welcome the drop in the price of Bitcoin, as it allows them to buy the dip and buy more Bitcoin at a price below what is currently believed to be true.
Looking at this point, Xinhuo had previously mentioned the Fed's money printing plan. Before that, nearly 160 million households in the United States were expected to receive another check to stimulate the economy after the passage of the $1.9 trillion economic stimulus plan. By injecting more debt as part of its fiscal response to fight the pandemic, the U.S. government is actually hurting rather than helping the U.S. economy. To prevent the market from collapsing, the ideal control measure is to allow as much as possible to flow into the secondary market. The emerging secondary market of the currency circle must receive no less funds than the traditional financial market.
The above is Xinhuo's firm belief that this round of bull market will not end at present, and there is no need to be too concerned about 3.12. Even if the improbable big drop does happen, everyone does not need to sell, because the currency price will be in a very short time rebounded again.
Let me tell you about the situation:
Author/firework teacher-yym, xinhuo9418
Author/firework teacher-yym, xinhuo9418
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