Bitcoin has earned more than 120% in the past three months. Is it time for Stud?

Things will get worse before things get better. ————Frederick Buckman “Bear Town”

Since the emergence of Bitcoin, it has been declared "death" more than 360 times. Recently, angel investor Jason Calacanis also said on Twitter that Bitcoin is likely to be replaced by a new technology.

However, since February, Bitcoin has been rising for nearly three months, and the price has soared from around $3,600 to $8,600. Although the current gains have declined, the increase in the past three months has exceeded 120% .

Driven by the recovery of Bitcoin, other mainstream currencies have also risen, and EOS has even regained its high of $8, reaching a new high this year.

Such a gratifying rise also attracted media coverage.

Many media outlets say that Bitcoin is the best performing asset in the world during the same period, far exceeding the mainstream investment markets such as oil, gold, S&P 500 and Nasdaq .

After nearly a year of silence, has the bitcoin bull market arrived?

Market sentiment

In fact, market sentiment is inextricably linked to cryptocurrency.

According to the data from Alternative.me, the recent market panic and greed index is 71, which has reached its highest value this year.

Tim Enneking, chief executive of Digital Asset Management, believes that the continued decline last year has depressed investor demand .

Once bitcoin begins to show a clear upward trend, a large number of users and funds will flood into the market, thus pushing the price of bitcoin further.

According to the statistics provided by statista, the number of Bitcoin global blockchain wallet users has maintained a high growth rate. The first quarter of this year increased by 8.6% compared with the previous quarter and increased by 44.7%.

In addition to the lucky ones who just caught up with this round of the market, more are bitcoin "short" and analysts who are being beaten.

When Bitcoin broke through the $5,000, $6,000, and $6,500 marks from $3,600, many analysts thought they had reached the high point of Bitcoin and were about to face a callback.

However, in reality, Bitcoin has directly broken through $8,000.

After experiencing this series of quotes, investors feel that "more than 3,000 US dollars of bitcoin may not be bought again."

Bitcoin “short” also suffered a bloody lesson. In a week, the amount of bitcoin “short” in exchanges such as OKEx and Bitmex exceeded even 4 billion yuan.

After this round of bitcoin skyrocketing, the situation of the long bears has reversed.

According to Bitfinex's position ratio, the current ratio of long and short positions is approximately 56:44.

Reason for the rise

In-depth analysis of the rising price of the bitcoin, the reason for the rise is not without trace.

Some analysts believe that Bitcoin has the characteristics of integrating safe-haven assets and risky assets.

As the trade friction between China and the United States intensifies and the global political situation is turbulent, Bitcoin has become a safe-haven asset superior to gold .

In addition to political factors, Wall Street's financial technology giants have also extended an olive branch to the encryption market.

As early as February of this year, JP Morgan Chase and Facebook announced the issue of issuing stable currency to solve the problem of cross-border settlement.

As one of the world's largest stock exchanges, Nasdaq, in addition to its online Bitcoin Flow Index (BLX) and Ethereum Mobile Index (ELX), also tried to pass its platform.

Once the test is successful and approved, Nasdaq will be the world's first stock exchange to use blockchain technology to issue shares .

Fidelity Digital Assets, a subsidiary of Fidelity, the world's largest asset management company, is preparing to officially launch a regulated hosting platform for relevant investors and institutions.

According to Michael Novogratz, CEO of Galaxy Digital, Bitcoin can be an effective means of value storage with the entry of traditional giants.

In addition, halving bitcoin is also considered to be an important factor in the rise in bitcoin prices.

In fact, bitcoin will start to rise in the year to half a year before the halving, and enter the next bear market after reaching its peak, which is the economic cycle of Bitcoin.

The halving of Bitcoin's next round is expected in May 2020, and the market's expectation of halving bitcoin also boosted bitcoin prices.

future development

Although the encryption market is not hot, people in the circle still don't think that "the bull market has arrived."

Former JP Morgan Chase trader and currency analyst Tone Vays said that since Bitcoin has not made a sharp correction since breaking through $3,200 (early February), there has been no major correction between $5,100 and $5,400.

Therefore, the possibility of a bitcoin price callback is high.

Zhu Chenglin, chief executive of the company, said in an interview that although the recent emergence of IEO (Initial Exchange Offerings) led to the rise in the market.

However, the current IEO heat has passed, the new baton has not appeared, and the warming up during this time will soon end.

In fact, the surge in 2017 is directly related to Ethereum ICO financing, and the influx of capital directly blows up the bubble in the encryption market.

Many projects can directly obtain tens of millions of financings with a single paper white paper and several “big names” with titles.

However, financing that is too easy to produce does not generate new value. These inaction projects can only be “paper-based” and there is no impetus to the development of blockchain technology.

Many new financing models, including STO and IEO, which have emerged since then, cannot promote the application of blockchain technology.

In the end, it is just a game of funds.

However, for the blockchain technology itself, although many projects have tried to achieve the scene, it has to be acknowledged that cryptocurrency is an irreplaceable field of blockchain technology.

In addition, national regulatory attitudes and regulations remain an important obstacle to the development of cryptocurrency and blockchain technology.

In addition to China, India and other countries strictly opposed to cryptocurrencies, the attitude of the important power of the United States is not clear.

It is understood that the Bitcoin ETF submitted by VanEck and SolidX as early as last year was again approved by the US Securities and Exchange Commission on May 21.

This means that the US Securities and Exchange Commission still believes that the "fraud, operational behavior" in Bitcoin will seriously damage the interests of investors.

In addition to the Bitcoin ETF, the bitcoin futures contract launched by Bakkt has been repeatedly postponed. In July, it will only be the User Acceptance Test (UAT).

Despite the rise in bitcoin prices, there is currently not enough incentive to maintain Bitcoin's current market.

For investors, cautious investment is a safer choice than blindly believing in the bull market.