In recent days, some friends came to ask Tingjun what he thought of the Bitcoin trend next.
Friends who are familiar with Ting Jun know that Ting Jun is a long-term investment, and generally does not make short-term price predictions. However, the recent market fluctuations have been huge and have broken through the scope of short-term fluctuations. This is an important price inflection point for cryptocurrencies in the past year or two. It is still necessary to talk about opinions.
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The root cause of the recent cryptocurrency slump is the global capital market slump, especially caused by the U.S. stock slump. Ting Jun in a previous article, "Is Bitcoin a safe-haven asset? Mentioned in:
Bitcoin cannot be spared from the full-scale plunge of the asset market, and the current plunge of the global capital market is mainly caused by the liquidity run on the capital market caused by the global spread and outbreak of the new crown epidemic.
Liquidity runs, that is, when asset prices collectively fall, everyone is short of money, and all assets that can be sold will be run. At this time, things with better liquidity are more resistant to falling, and things with poor liquidity will fluctuate sharply. And the thing with the best liquidity is undoubtedly the currency itself, so once the crisis comes, people will scramble to sell all kinds of financial assets and exchange them for cash. Cash is king is the true portrayal of the crisis.
Therefore, to predict the trend of cryptocurrencies, you must analyze the subsequent development of the epidemic. Don't suspect that the epidemic news is how many new cases are added every day. The global epidemic situation is now the most important news every day.
This round of asset slump was essentially caused by the ineffective control of the European and American governments in the early stage. Previously, Europeans and Americans and even government officials were too optimistic and did not fully realize the powerful infectiousness and destructiveness of the new crown virus. The overall outbreak caused panic and liquidity runs among the people.
The current asset prices are a response to the poor response of the former European and American governments to the epidemic situation. If every country has attracted enough attention like China, strict epidemic prevention work will not be the result.
Now, as the number of confirmed diagnoses has skyrocketed, many countries no longer take the epidemic lightly. With US stocks soaring on Friday, the last round of panic has basically stabilized. But the question is, can the epidemic be brought under control if the government pays attention? Tingjun is going to make a question mark.
Italy is completely out of control, medical resources are very scarce, and hospitals can only give priority to treating patients who are more likely to be cured. Sweden has decided to stop counting the number of confirmed cases and no longer test mild and suspected patients; Capitalist country Britain actually moved out of the ridiculous theory of herd immunity, which is really shocking!
Therefore, it is really hard to say whether the government can control the epidemic. Britain, Sweden and even surrendered directly. Not every country has a system and execution capability like China. If the government has tried everything to control the epidemic, in the end it will not be controlled. Live, will inevitably lead to more serious panic among the people, which in turn will lead to more severe liquidity runs.
In the face of the huge panic of liquidity runs, what halves the market and what Bitcoin beliefs do not exist at all. Liquidity runs can be the biggest or even the only price influencing factor during a panic period.
Of course, a plunge is not entirely a bad thing. Fortunately, it depends on your position. For those with a lot of cash or USDT, a plunge is a golden opportunity.
In the past few days, Tingjun observed that the premium rate of USDT is very high, the foreign exchange market is 1 US dollar = 7.0036 yuan, and the over-the-counter USDT price fluctuations are very large. When it is low, it is 7.35, and the premium is 4.9%. The time even reached 7.5 with a premium of 7.09%.
It shows that the halving price after the plunge is very tempting to the market. Many people are eager to try, and the bulls are still thinking about how to bottom, and there is still a considerable distance to give up the chips in their hands completely, that is, if the government Efforts to control it still can't restrain the outbreak of the epidemic, which then causes the capital market to plummet, and there is still a lot of room for cryptocurrencies to fall.
Of course, the above is the worst case prediction. The good case is that the epidemic situation is under control and the capital market returns to normal operation. At this time, the logic of halving the market price will bring back the Bitcoin faith.
In fact, if we review the performance of the capital market during the SARS period in 2003, we can see that the sectors that suffered the worst declines at the beginning of SARS, such as catering and tourism, and transportation, are also the best performing sectors after SARS was controlled.
As for whether the development of the epidemic is going to be better or worse, whether the market is skyrocketing or slumping, only God knows.
Tingjun doesn't like to guess the price. When you face different situations, you can have your own strategy. You don't need to guess the price at all.
In view of the current uncertainty of the epidemic situation and market conditions, as well as the differences in individual positions, we will discuss the situation separately.
1. The shortest situation is the simplest. At present, the price is low. Partial positions are established first, and then positions are established in batches according to the situation.
2. If you are close to full positions, all you have to do is pay close attention to the epidemic situation, be able to predict the development situation of the epidemic situation, and make transaction adjustments in advance is the best choice.
If you can't judge it, you must pay close attention to the price trend. If you have time, you can keep an eye on the US stocks. Once the US stocks crash, you can sell the crypto assets as soon as possible.
If you do n’t have time to be busy, you can set a price warning. Some market software has a price warning function, and you will be notified by phone immediately if the price breaks.
Or set a downward take profit and stop loss order, and the price will be automatically traded if the plunge does not occur. If the plunge does not occur, reset the stop loss price every period of time (such as one day) to ensure that the stop loss price is based on the latest real-time Prices and declines.
If you do n’t throw it away at the beginning of the plunge, or you ca n’t bear to stop cutting meat, simply pretending to be dead is also an option, as long as you hold Bitcoin and mainstream coins, as long as you have sufficient cash flow and sufficient Patience. After going through this panic period, you can still rise back later. As to when it comes back, it is difficult to say, so cash flow is very important.
Note that once you choose to die, you must pretend to the end. Do not leave it out at the beginning. When you find that the market has fallen all the way down to the point where you ca n’t bear it and despair, it is often the lowest point of the market. Don't change it.
As for leverage, the recent skyrocketing market, Tingjun is not recommended to use leverage. The day before was the biggest drop in US stocks, and the next day was the biggest drop in history. The script did n’t dare to write that way. Do you dare to increase leverage?
Ting Jun, Master of Finance, has been engaged in equity investment for many years, Secretary of Shanghai Tongxian Economic Pilot Zone, former editor of CoinVoice.
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Disclaimer: This article does not constitute investment advice, the market is risky and investment must be cautious.