It has been more than one month since the global financial market crash bottomed.
Since the Dow Jones Industrial Average bottomed out on March 23, it has risen by 24.5%. However, since Bitcoin's bottomed out on March 13, the biggest increase has reached 95%. The increase in Litecoin and Ethereum has exceeded 100%, and the rebound in the cryptocurrency market has become more eye-catching.
In this “game” where global financial assets bottomed out, the crypto market is undoubtedly the “dark horse” and the biggest winner in this game. A lot of data and evidence also indicate that cryptocurrencies are becoming a must-have asset for long-term investors.
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1. The financial market rebounded across the board, and the crypto market became a "dark horse"
Affected by the slowdown in the spread of the epidemic, the global stock market opened on Monday. The three major US stock indexes opened higher and higher, eventually closing up more than 7%, and the Dow Jones Industrial Index rose 7.33%. Many cryptocurrencies have risen more than 9%, of which the largest increase in Ethereum is more than 19%.
At the same time, European stock markets closed sharply higher, with the British FTSE 100 index, the German DAX30 index, and the French CAC40 index all increasing by more than 3%. In the Asia-Pacific market, Japan and South Korea stocks also rose sharply, and Hong Kong stocks rose strongly. The global stock market is collectively higher.
In terms of A shares, the A50 index closed up 1.48% on Monday, and the intraday rise once exceeded 2%. After the opening of the US stock market in the evening, the A50 index rose again. As of press time, it rose 0.72% again. Under the general rise of global stock markets, the opening performance of A shares is worth looking forward to.
Anxin Securities analysts believe that although the downward pressure on external demand is inevitable in the next stage, with the firm support of policies, the recovery trend of the domestic demand sector will be more certain, and liquidity will remain ample during this process, and the A-share market as a whole Valuation is already at the bottom of history. Recently, the pace of monetary policy has accelerated. Overseas markets are gradually out of panic. The probability of crude oil reaching a new round of production reduction agreements is rising. The short-term A-share market is expected to continue to rebound. Infrastructure and traditional infrastructure, and at the same time, you can focus on high-quality companies that exceed expectations in the first quarter.
BOCI believes that the market will be dominated by profit in the second quarter, and the market may take the lead in declining profit expectations. Afterwards, with the gradual clarification of policy adjustments, fundamental recovery expectations are expected to usher in bottoming out and stabilization. In terms of configuration, the high-boom industry represented by 5G construction, remote office, and gaming is expected to cross the mist of market uncertainty in the second quarter. From a medium- and long-term perspective, we are firmly optimistic about the investment value of backbone enterprises.
In the continuous stimulus measures of various countries around the world, the price of gold also rose sharply. The gold futures contract in June once hit a seven-year high of 1715.8 US dollars per ounce, and finally closed at 1693.9 US dollars per ounce, an increase of 2.93%. "Digital gold" bitcoin has also risen sharply. OKEx market shows that bitcoin rose 8.41% in the day, temporarily reported $ 7409, hitting a high since March 12, and has recovered most of the decline since the "312 plunge". The goodness of the macro market is also considered to be an important factor in this surge.
In terms of gains, crypto assets such as Bitcoin have become the subject of the largest short-term rebound. Among them, the biggest increase in bitcoin price since reaching bottom on March 13 has reached 95%, and the increase in Litecoin and Ethereum has exceeded 100%, which exceeds the rebound of most assets.
Cryptocurrencies are definitely a dark horse among global financial assets.
In fact, since the March plunge, short-selling sentiment in the Bitcoin market has been dominant. OKEx data shows that the number of long and short BTC positions has been below 1 since most of March 13, and it was as low as 0.64 on March 20. Similarly, the average ratio of BTC elite long and short positions has always been dominated by short positions.
Nonetheless, Bitcoin has continued to rise in a wide range of shocks, and the most recent 4-hour candle has shown 8 consecutive days. The continuous rise is also accompanied by a large number of short positions. Coin data shows that in the past 24 hours, the entire network BTC has burst a total of 100 million US dollars, and shorts have become a rising fuel.
In the context of the "universal contract" and the bearishness of retail investors, Bitcoin's continuous rise is not unexpected.
On the one hand, the market is always anti-human. When most people reach a consensus on one direction, then this direction may be wrong. When most people think that short selling can make money, then these investors may become the "fuel" in the process of rising.
On the other hand, retail investors generally use the 2018 bear market as a sample for analysis, and believe that after the market plunges, they will definitely bottom out for a healthy rise. However, the market is not always as always. In this round of gains, we see that hundreds of millions of dollars of liquidation are not uncommon, and the bitcoin used by retail investors to sell short may have been included in the market.
Therefore, anti-humanity is still the most distinctive feature of the encryption market.
2. Cryptocurrency, the “long-term upstart” in the eyes of institutions
The key factor for Bitcoin's bottoming and a sharp rebound this time is the massive purchase of institutional investors.
According to recent survey data from data and analysis agency IntoTheBlock, the number of large bitcoin transactions (transactions valued at more than $ 100,000) surged from a low of $ 3.1 billion on March 29 to a high of $ 5.55 billion on April 2. This indicates that large buyers are buying Bitcoin. At the same time, the surge in CME Group's futures trading volume also indicates that institutional investors have entered the market. The cryptocurrency platform BitMEX's open positions have declined during this period, which also shows that retail investors are not the factors that contributed to the surge in Bitcoin prices.
The agency also said that in the medium term, this may indicate that large investors in the crypto market are accumulating bitcoin, which is expected to rise further in the medium to long term.
A recent survey by cryptocurrency data research agency Acuiti shows that 97% of traditional companies are considering trading crypto assets in the next two years.
In Acuiti ’s recently released “Digital Asset Transaction Report,” the survey targets executives from buyers, sellers, and proprietary trading groups (specializing in traditional derivatives trading, clearing, and execution). There are currently about 100 cryptocurrency exchanges The venue is launched for institutional customers. The report shows that about 57% of traditional trading companies have traded in Bitcoin derivatives, 29% have traded in Ethereum derivatives, and 97% of traditional companies are considering trading crypto assets in the next two years. The three main considerations for these companies are liquidity, volatility and arbitrage opportunities.
At the same time, many industry organizations also give objective assessments of cryptocurrencies.
For example, on March 29 this year, the crypto rating agency Webster Ratings tweeted that the future profit potential of BTC is very large. In this bull market cycle alone, the price of Bitcoin may easily soar 10 times. The appreciation of the second and third generation cryptocurrencies may be much greater.
As another example, game developer Double Jump.tokyo (Tokyo Double Jump) commissioned the research team of So & Sato law firm to conduct a comprehensive report on Japan's crypto assets. The report stated, "The Japanese crypto market is strictly regulated. At first glance Under the supervision, it seems excessive, but this may help the market to mature in the medium and long term. This will allow more institutional investors to enter the market and increase their holdings in the field of crypto assets. "
Cryptocurrencies are becoming part of the institutional investor's allocation.
At the same time, more investigations are also pointing to the arrival of the cryptocurrency bull market, and these investigation institutions can also attract more investors to enter the market and form positive feedback to the market.
A recent research report from the blockchain data website Arcane Research stated that Bitcoin's volatility is very high, which in turn affects its transaction volume. Based on the average transaction volume of 7 days, the transaction volume of Bitcoin has dropped again. Even with the latest decline, Bitcoin's transaction volume is still higher than the 2020 average. In most cases, a price increase plus a decrease in trading volume is a bearish signal. However, as far as Bitcoin is concerned, the fact that its transaction volume continues to be above average indicates that Bitcoin still has bullish momentum.
According to recent survey data from Bytetree, a blockchain investment consulting firm, Bitcoin's on-chain activity has surged. This finding further enhances Bitcoin's bullish sentiment.
The bitcoin price trend is completely different from US stocks, which also makes the crypto market more independent.
According to AMBCrypto, after the plunge, Bitcoin and the Dow Jones Industrial Index have diverged in recent days. In this regard, an article published by Webster Ratings stated that traditional stocks and bitcoin are only associated for a short period of time. However, they are currently in different long-term cycles.
Data from the Webster Rating Survey also shows that the Dow Jones and S & P 500 have been steadily rising since the end of 2018. The Dow Jones index rose from 22628 points to 28402 points on February 24, 2020, while the S & P 500 index rose from 2444 points to 3247 points on March 3, 2020. Both of these equity assets reflect a long-term bull market cycle, and the market has recently plunged from cycle highs. However, the situation with Bitcoin is completely different. Bitcoin also showed a bullish rebound in early 2019, but in the past 9 months, Bitcoin has mostly shown a downward trend. The 2020 rally did not exceed its 2019 high, and the recent decline occurred at the long-term cycle low of Bitcoin's $ 4,000.
Therefore, whether it is a short-term violent rebound in the crypto market or a long-term advantage in the crypto market, long-term investors are given sufficient reasons to hold cryptocurrencies.
In the current turbulent international financial situation, the "First State Bank" in West Virginia, which has more than 100 years of history, has just declared bankruptcy, and its accounts will be taken over by MVB Bank. During the 2008 financial crisis, more than 400 banks in the United States went bankrupt. The collapse of the First State Bank may be the beginning of financial systemic risk in 2020.
Where will the crypto market go? Just as Xu Kun, the chief strategy officer of OKEx, mentioned in the opening letter of the first anniversary of employment, there are also opportunities in the panic. The so-called unbreakable and unsettled, the old steady state is broken and the new stable state will be formed.