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Bitcoin's actual bottom is $10,000?

2022-07-06T10:44:47.514Z


Bitcoin (BTC) has recently recovered to the important psychological level of $20,000, which many traders see as a sign of a "bottom", but several higher time frame indicators suggest that Bitcoin's actual bottom will be at $10,000


Bitcoin (BTC) has recently recovered to the important psychological level of $20,000, which many traders see as a sign of a "bottom", but several higher time frame indicators suggest that Bitcoin's actual bottom will be around $10,000 .


Previously, both Bitcoin and Ether (ETH) weakened, with Bitcoin once falling below the $18,000 mark, the lowest level since November 2020; Ether once fell below $900.

Based on this calculation, since the beginning of this year, the two iconic products of the currency circle have fallen by more than 60% and 70% respectively, which has largely broken the once extremely confident "gambler mentality" of the virtual currency market.

Not only that, because countries have tightened monetary policies to fight inflation, global market liquidity has tightened, and risk assets have been widely sold off. It can be said that the "darkest moment" in the virtual currency market has arrived.

The total market value of virtual currencies in the world has fallen below the trillion-dollar mark, and it has fallen 70% from the high point.

In November 2021, the total market capitalization of the cryptocurrency market exceeded $3 trillion at one point.

When the "Lehman Moment" triggered global financial turmoil, global central banks had to save themselves.

Today's "Lehman Moment" in the currency circle, investors can't wait for any rescue.

(Getty Images)

What is the reason for this round of virtual currency plummet?

The direct trigger is naturally the US Federal Reserve raising interest rates.

The U.S. inflation data in May exceeded market expectations. The Federal Reserve announced a one-time interest rate hike of 0.75%. Global liquidity has tightened, and funds have flowed to safe-haven assets. The prices of risk assets such as U.S. stocks and crude oil have fallen significantly, and virtual currencies with higher risk appetite are of course the first to bear the brunt .

Moreover, in the current global inflation environment, the tightening of liquidity will go through a long process, which means that there is no longer room for virtual currency profit, but huge risks are highlighted, so speculative capital has accelerated away from this market.

The plummeting and soaring is the consistent performance of virtual currencies represented by Bitcoin. They have no legal tender status, no real value support, and related transactions are purely speculative speculation.

A series of risk events in the field of virtual currency assets recently made these virtual currencies encounter a huge liquidity crisis.

Compared with the global central bank spending trillions of dollars to rescue the subprime crisis caused by the collapse of Lehman Brothers in 2008, no one will help the liquidity crisis of encrypted digital assets.

It is worth mentioning that in the financial stability assessment report released by the European Central Bank on May 30, the European Central Bank took the risks of encrypted assets to financial stability as a new focus; the semi-annual financial stability assessment report released by the Federal Reserve also stated that stable The currency may be subject to a run risk, leading to risks to global economic activity, asset prices, and financial stability.

U.S. inflation data hit a 40-year high in May, and the Federal Reserve announced a one-time rate hike of 0.75 percent in the middle of last month.

(Getty Images)

In recent years, the regulation of encrypted digital assets around the world has become stricter, and virtual currencies are still popular among many investors. An important reason is that many people believe that encrypted digital assets will continue to develop rapidly.

If this virtual currency crisis eventually leads to a significant "ebb" of this belief, the "splendid building" of global encrypted digital assets will undoubtedly become a tower on the sand.

This day is just sooner or later.

Different from other traditional assets, virtual currency has no intrinsic value to anchor, no fixed assets, no income stream, and no underlying business. Once there is no "belief" support, any "analysis method" is very ridiculous.

Perhaps, this "bloodbath" can break the once extremely confident "gambler mentality" of the virtual currency market.

How far is it from the credit bankruptcy of the cryptocurrency once again?

High U.S. inflation, Fed from dove to eagle

For details, please read the 324th issue of "Hong Kong 01" Electronic Weekly (July 4, 2022) "

Bitcoin is not far from $10,000

".

Click here

to try out the weekly e-newsletter for more in-depth reports.

Source: hk1

All news articles on 2022-07-06

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