Bull market early or bear market trap?

For cryptocurrency investors, the most important question is whether this round of rising currency prices is a bull market restart or a bear market trap.

Yesterday evening, the price of Bitcoin rose in one hour. The price rose from a low of around $6,800 to around $8,100. It rose almost 20% during the day. Led by Bitcoin, other virtual currencies also led a strong rebound, with single currency gains exceeding 50%. Faced with the collective heating up of the virtual currency market, many investors shouted “the bull market is back”.

According to data from the website CoinMarketCap, the market value of Bitcoin increased by almost 20 billion dollars in one day, and the entire virtual currency market experienced an overall market growth. There was no “search” effect. Based on Bitcoin’s daily transaction volume of more than 9 billion US dollars, billions of additional funds should have entered the market yesterday, instead of equity funds.

In fact, during the rise of Bitcoin, Bitfinex, a digital currency trading platform, also recorded a number of large purchases. With the increase in buying Bitcoins, many shorts were forced to close their positions, further extending the market’s uptrend. For this phenomenon, Nick Kirk, Chief Data Officer of Cypher Capital, also expressed approval. At the same time, he also believes that this sharp rebound is likely to be a response to the release of early regulatory pressures.

Pantera Capital Management, one of the largest digital currency hedge funds, said Bitcoin has bottomed out. US$6,500 is the low point for Bitcoin’s bear market. Bitcoin will stay above that price for most of this year and may even surpass last year’s record high of US$20,000.

Fundstrat founder Tom Lee also expressed confidence in Bitcoin. He believes that the current Bitcoin P/B ratio and other indicators are almost the same as at the end of the 2014 bear market, and it has completed a major technical correction. Based on this, he stated that the value of Bitcoin could more than triple this year and reach $25,000 by the end of this year.

Historical data shows that Bitcoin has risen in the second quarter of the calendar year. In the second quarter of 2011, Bitcoin rose 1964%, 36.25% in 2012… 61.98% in 2016 and 131% in 2017.

Of course, Bitcoin OTC volume is also showing signs of market recovery. Since March, Bitcoin trading volumes in Canada, Europe, Vietnam, Mexico and Vietnam have soared to record highs.

With the successive acceptance of the financial institutions of the giant Soros hedge funds and the Rockefeller family, the financial size of the virtual money market will expand further.

However, it is worth noting that while Bitcoin is currently bullish, it is still in a downtrend and has yet to effectively break out. It remains to be seen whether the virtual currency market has really been turned upside down. Investors should always be vigilant and pay attention to position management.

More importantly, the world’s major Bitcoin markets, including the United States, have sought to establish regulatory frameworks. Regulatory uncertainty will inevitably have a greater impact on the short-term development of the virtual currency market. In the long run, an orderly and healthy market can go further.