5.19, another day to turn off the lights and eat noodles.
Last night, the crypto market saw a two-hour blackout between 8:00 p.m. and 10:00 p.m. BTC fell from 39,000 to around 29,000 and ETH fell below 2,000, with the most valuable coins in the market dropping wildly, driving the overall market down in a free-fall frenzy. At the most panicked moment, most of the coins in the market had a daily drop of more than 40%. The crypto market has mostly taken half a year to rise to its current highs, but it only took 2 hours to fall back to where it was at the beginning of the year.
The frantic decline triggered a tragic stampede in the contract market, with the size of the mainstream market blowout approaching $2 billion as of 10:30 p.m. yesterday.
Of course, there is a plunge, there are people waiting below the bottom, just you do not know whether to copy the tip of the knife, the back of the knife or the handle. The good thing is that the market did not repeat the tragedy of 3.12, the overall market began to stabilize after 10 p.m. BTC rebounded once more than $40,000. The ubiquitous Sun came out again to show how important he is to the cryptocurrency world.
But will the crypto market really see a big rally on this?
In fact, there have been some signals in the market prior to this selloff. At least at the news level, there have been some frequent bearish signals.
Just a day earlier, on May 18, the China Internet Finance Association, China Banking Association and China Payment Clearing Association jointly issued the Announcement on Preventing the Risk of Speculation in Virtual Currency Transactions, which required financial institutions and payment institutions not to conduct business related to virtual currencies. The Financial Times then directly attributed the immediate trigger for the decline to the Chinese government’s regulatory announcement.
Not only domestically, but the Office of the Comptroller of the Currency (OCC), in conjunction with the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), is also considering the creation of an “interdepartmental sprint group” for cryptocurrency regulation, according to Michael Hsu, acting director of the OCC, who has been working with Federal Reserve Board Vice Chairman Randal Quarles and FDIC Chairman Jelena McWilliams have been in discussions about a “cross-sector sprint group” on cryptocurrency regulation in the banking sector, and they have been “working together “to create a unified framework and set of cryptocurrency definitions.
Regulatory tightening is just one aspect, but Musk, once a key supporter of BTC, recently suspended BTC’s payment channels and publicly criticized BTC’s huge waste of energy consumption, which has become a central factor in splitting the market.
The world’s richest man undoubtedly holds an important place in the hearts of global crypto investors. If we turn forward a little bit to the course of the current bull market, we can find that BTC surged from 30,000 to 50,000 precisely from the time Tesla announced to spend $1.5 billion to buy BTC. It can be said that Musk’s personal support for BTC was the key logic of this bull market in the crypto market. And now this logic has been at risk of collapse, and the sentiment of market bulls has been severely depressed.
Finally, the crypto market has recently become overly speculative. The “animal coin” frenzy of two weeks ago was the truest reflection of this speculative bubble. A project with no innovation, a few lines of code, a so-called “fair distribution” and some gimmicky marketing slogans, and the myth of a hundredfold and thousandfold wealth creation. It is too magical to think about. But this carnival by the V gods to a bottom.
History does not simply repeat itself, but it is strikingly similar. The bubble moments that the investment gurus experienced in history are really mapped into the reality of the cryptocurrency world this time.
Is the bull market still here?
As BTC rose to 60,000, many would say that we might not see BTC starting at 2 very easily again, but at least last night we did. After dropping from near $40,000 to 29,000 in just 2 hours, many people are asking, is the bull market still alive?
Despite all the noise that fills the market, it’s not even a problem in the eyes of some BTC believers.
Just a few days ago, PlanB touted on Twitter its projection based on the S2F model that the price of BTC would rise 5 times in 6 months.
And last night, he added further to his statement. He believes that 60,000 is not a top and that according to the data on the chain, we are only just coming out of a bear market for a few months and there is still a lot of room above.
Another Twitter user, on the other hand, believes from the perspective of technical analysis that the current trend of BTC is similar to the process of the bull market in 2013 and 2017, and that we are just in the trimming phase of the bull market relay, with a wide space above.
For internet vloggers or experts and celebrities, whether they are long or bearish, they will have their logic and reasoning and may be proven correct at some point in time.
But for the average retail investor, it is more important to be clear about what you think. Why should I invest in the cryptocurrency world, and with what kind of mindset should I invest in it? There are just two kinds here, the longer-term value-based view and the short-term speculative view.
Probably before 2020, many people don’t dare to say they invest in crypto represented by BTC for the long term because of the value, because the market is really a bit too confusing. But with all the capital and real companies moving in, the crypto market is not the same as it was yesterday, and the mainstream coins such as BTC and ETH have become long-term value properties.
For long-term investors, the development of the crypto market itself and the entry of various traditional companies into the crypto market are two important investment clues. Although Musk publicly criticized BTC’s energy consumption problem, which weakened the main line logic of the current round of BTC’s rise, the market is constantly gaming development, which does not mean that there will not be new traditional enterprises to lay out at low levels.
For short term speculation, if you can bottom near 30,000 last night, you will indeed make a good gain, but what happens after that? Should we leave the market quickly or wait and see?
From a daily perspective, this wave of five consecutive negative downward momentum is very strong, after the release of short-term panic, the market will certainly usher in a rebound. However, such a strong decline to try to direct a v-shaped turnaround may be a bit too idealistic. The most likely scenario is that prices will play repeatedly between 30-40,000, up and down after the shock, choose the direction. And the market may also usher in very strong volatility before coming out of the direction completely. Short-term investors need to pay attention to the risk of market volatility.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-cost-of-institutional-positions-has-not-been-penetrated-justin-sun-plunge-after-the-market-can-be-expected/
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