Bitcoin fell more than 10% during the session, and the four major exchanges closed nearly $ 700 million in intraday trading. Is "digital gold" a false proposition?

Author: Wang Junhui

Source: Brokerage China

Editor's Note: The original title was "Shock Overnight!" Bitcoin fell more than 10% during the session, and the four major exchanges closed nearly $ 700 million in intraday trading. Is "digital gold" a false proposition? ", This article has been deleted without changing the original intention of the author.

On the evening of March 8, Bit staged a "Scared Night". It fell more than 10% during the session, exploded nearly 200 million US dollars in one hour, and shrank its market value by more than 11 billion US dollars. The mainstream currencies have all fallen more than 10%. At present, prices have fallen back to the level in January, and some investors said that "there is also a rush to go and a rush to go."

Du Wan, the co-founder of Contract Emperor, told a Chinese correspondent at the brokerage firm that the contract emperor's big data showed that on March 8th and 9th, the four major exchanges (OKEx, Huobi, Binance, BitMEX) had 442 million positions and $ 373 million. The short position in 24 hours was $ 682 million.

The expected halving price has not yet arrived, and some traders told the brokerage Chinese reporter that bitcoin has now entered the downward channel and that the market reversal signal has not yet appeared. If bitcoin investors still invest in bitcoin with the expectation that "halving the price will bring bitcoin prices," these investors will still face greater market risks in the future.

Bitcoin falls more than 24% in the month

Bitcoin hit its biggest one-day drop since October 23, 2019. Starting at 20:00 on March 8th, the price of bitcoin started to fall, and once approached the $ 8,000 mark during the session. On the 8th, it fell to $ 714.98, a drop of 7.85%. During the day on March 9th, its price failed to stop falling, and it continued to fall below the two important nodes of 8000 and 7800. The lowest price fell to $ 7,680. The current quotation has rebounded, and as of the time of publication, the price was $ 7,918.

This price has dropped 24% from the peak of $ 10,498 on February 13. Among them, the decline in the past seven days was nearly 10%.

Affected by Bitcoin, other mainstream crypto digital currencies fell. As of March 9th, at 18:00, Ethereum (ETH) was reported at US $ 203.84, down 11.6% daily; Bitcoin Cash (BCH) was reported at US $ 273.04, down 14.45%; Litecoin (LTC) was reported at US $ 50.02, down 15.44%.

AICoin analysts told brokerage Chinese reporters that from March 6 to March 8 on the eve of the plunge, Bitcoin experienced a 48-hour sideways consolidation. During this process, a large number of large orders were sold in the spot market. AICoin PRO K line main large order statistics show that from 16:00 on March 6 to the early morning of March 8, Huobi and OKEx BTC spot trading pairs sold a total of 20, a total of 3,79.98 BTC. There were only 5 big orders, with a total turnover of 363.82 BTC, and a difference of -3407.16 BTC.

OKEx senior analysts told brokerage Chinese reporters that many people like to link the plunge of bitcoin on the 8th with the macro-economic factors such as the plunge in oil prices and the growing epidemic, in fact there is no relationship at all. The rise of bitcoin since January is due to the market's expectation of "half of bitcoin", because historically, the first two rounds of bitcoin halving have doubled the price of bitcoin. Therefore, the market is generally optimistic about the "halving market".

However, if we carefully study the multiple asset price crashes in history, we will find a feature, that is, in the early stage of the market crash, it is generally believed that asset prices will always rise, whether it is the "Tulip Bubble" or "2000 The "tech bubble of the year," or the "US housing crisis in 2008," have all seen this.

When the price of bitcoin reached the $ 10,000 position, it actually reached the critical stage of the long-short game, because bitcoin exceeded the $ 10,000 mark only three times in history, and it plummeted shortly thereafter.

From a technical analysis point of view, since mid-to-late February 2020, the Bitcoin market has gradually formed a symmetrical triangle. This is a common finishing pattern in technical analysis. Its upper limit is a downward slash and the lower limit is an upward sloping line. If the price breaks above the resistance line, it is a bullish signal; conversely, if the price falls below the support line, it is a bearish signal. After the Bitcoin price broke through the support line at the end of February, it actually indicated that the Bitcoin market has entered a downward trend. Although the bitcoin price subsequently returned to the $ 9,000 position, it was actually only a B-wave rebound; the 8-day drop was just a common market performance of bitcoin in a downward trend.

"To correctly recognize where the market is, we cannot be lucky. At present, Bitcoin has entered the downward channel, and the market reversal signal has not yet appeared. If Bitcoin investors still hold on," Half the price will bring bitcoin prices up. "Expect to invest in Bitcoin, I believe these investors will still face greater market risk in the future." The analyst said.

Four major exchanges closed positions of $ 682 million in 24 hours

With the increase in the size of the BTC futures contract market, the impact of the contract market on the spot market price is also increasing.

Compared with traditional financial assets, the digital currency market fluctuates more frequently and violently, and because there is no unified supervision, the market is extremely risky. Moreover, the current contract trading platforms are not officially established, and their independence and transparency are not good. Some trading platforms do not meet the technical standards. When the market fluctuates violently, user stop loss failures or even stop loss frequently occur, resulting in heavy user losses. .

In the futures market, AICoin PRO data shows that as early as March 5th at 08:00 and March 5th at 17:00, the number of BitMEX BTC perpetual contract positions soared by 70 million. There were many large sell orders in the process. The transaction, the single transaction amount of more than 4 million US dollars, the main signs of short-selling.

In the early morning of March 8, the cryptocurrency market was the first to open a plunge mode. Within 36 hours, it fell from $ 9,187 to a minimum of $ 8,000, sweeping the bonus of $ 1200. The futures market is full of corpses. As of the time of writing, in the past 24 hours, the total amount of net positions in the entire network has reached US $ 545 million, equivalent to RMB 3.789 billion. Among them, long positions were US $ 534 million and short positions were US $ 11.38 million.

In terms of battlefields, BitMEX is the most fiercely engaged, with 218 million USD in liquidation positions, accounting for 40% of the entire network. This also further verifies that the previous main positions were mainly concentrated in BitMEX. In terms of combat tools, BTC is the main tool. BTC contract positions were $ 364 million, accounting for 66.81% of the entire network. The range of positions was large, concentrated in the 8052-8636 range. A total of 9,146 BTC contracts were exploded, with an average of $ 39,900 per order, and the largest warehousing order was $ 10 million.

At this point, the total position of the three major platform contracts has fallen to $ 2.563 billion. During the previous period of rise, this total was once approaching 4 billion US dollars.

The digital currency contract APP contract co-founder Du Wan told the brokerage Chinese reporter that the contract emperor's big data shows that on March 8 and 9, the four major exchanges (OKEx, Huobi, Binance, BitMEX) closed positions in two days. Amounts were 442 million and 373 million. The short position in 24 hours was $ 682 million. This wave completely hit the market's confidence and most investors were hit hard.

According to Du Wan's analysis, after reaching the Huobi spot price of US $ 10,500 on February 13, BTC fluctuated and fell, reaching US $ 8,418 on March 1. It then rebounded and reached $ 9,187 on March 7. From March 7th to March 9th, BTC quickly "collapsed", falling from $ 9,187 to $ 7676. This wave of decline has given up most of the gains of the Mavericks a year ago, trapping many high-end retail investors who chase cars and halve the bull market. Halved the three silly ETC, BCH, BSV all cut more than 50% from this year's highs. "Three silly calves come and go in a hurry, too."

"The cottage is not dead, the bull market is not going." Next is BTC heading for a long bear market or copying the miracle after halving in the past? Du Wan believes that the withdrawal of three silly funds and the decline in altcoins is an important foundation for the bull market after halving.

"Digital Gold" Hedge Is a False Proposition?

As an alternative asset, bitcoin has the title of "digital gold". Its proponents believe that because its total amount is only 21 million, bitcoin can resist inflation as well as gold and has a hedging property.

This view is not without foundation. Unlike other mainstream assets such as stocks, futures, bonds, and commodities, which are greatly affected by the external environment, since the birth of bitcoin, its price trend has been relatively independent. Excluding the impact of several major direct policies, the rise and fall have become their own. If you look at the absolute price, compared with the price of a few cents at the beginning of the birth, it is incomparable, and it has maintained a good upward trend over a longer time span.

However, from the recent performance of various market varieties, Bitcoin's so-called hedging attribute seems to be a "false proposition". "Digital gold" and "real gold and silver" have generally fallen sharply in global risk assets. The yield on US 10-year Treasury bonds has hit record lows and the dollar index has weakened, with very different performances. The former has been in an ups and downs pattern since it surged back in February, and the price of gold hit a ten-year high.