Cryptocurrencies have fallen sharply, with most of the mainstream currencies falling more than 10%. Yesterday, bitcoin suffered a big crash, with the lowest falling to US $30408, and compared with the highest point of US $41900, it dropped us $11400, or 27%! With the sharp fall of bitcoin, the cryptocurrency market has also plummeted. Among the top 100 in the market value, only 9% have fallen, and most of them have fallen more than 10%. There are many projects that have dropped more than 20%. Within one day, ten thousand yuan fell, and triggered the collapse of cryptocurrency, which really caused a strong shock. For a time, the views of bitcoin “bubble” bursting and bull market ending were full, which cast a great shadow on the market development. In fact, from the perspective of news, bitcoin has been highly beneficial recently: MicroStrategy said that bitcoin would reach 14 million US dollars after JP Morgan acquired 10% of its shares; skybridge capital held a conference call of bitcoin fund, but the conference network was jammed; Tesla founder musk said that it would not refuse bitcoin payment In such a favorable situation, the rise of bitcoin should be very strong in theory. However, the sudden collapse broke the offensive situation of bitcoin’s infinite rise, which also brought deep concern for the market. So, what is the reason for such a large decline? Who is the fuse of this fall, who should be responsible for this fall? According to market information, rabbit summed up the following common reasons: first, some people think that the main reason for the decline in the market is that the selling pressure of miners is at the highest point in 17 months! Cryptoquant’s data show that the bitcoin miner position index is at a level never seen since July 2019, implying that selling pressure from miners is at a 17 month high, according to cryptoquant. The last time it reached that level, BTC peaked at $17000, followed by a correction. That is to say, the miners’ selling pressure became the fuse of the decline. When bitcoin rose to a high of $40000, the profit driving was even stronger, resulting in selling pressure! However, Joseph young also made it clear that this sell-off is different from the last time. First of all, there is an unprecedented institutional demand for BTC. This can offset sales pressure. Second, because of the bull market, the miners are very profitable and they will profit from it. Selling pressure may bring down, but the impact will not be too deep and far. Therefore, even if there is selling pressure, and the decline is very large, we still see the upward momentum and trend from it! 2、 The short-term profits of institutions have led to a sharp drop in bitcoin recently! Darius sit, an analyst at QCP capital, a cryptocurrency quantitative trading company, said hedge funds made short-term profits after bitcoin prices soared at the beginning of this year, which may have contributed to the sharp fall in bitcoin prices. Sit noted that the bitcoin spread between CME, which mainly serves institutional investors, and other exchanges suggests that traditional fund managers may be profiting from bitcoin’s recent historic highs. As an institutional bull market, the actions of institutions play a decisive role in the market. From the previous news, the average price of bitcoin purchased by institutions is about $19800. Then, when bitcoin breaks through the 40000 high point, the profits of institutions have doubled, which is an unprecedented profit state for traditional investment institutions. Therefore, it is not surprising that locking in profits will become the operation strategy of institutions! However, this does not mean that institutions have withdrawn from bitcoin, and bitcoin prices may be able to break through better if they are higher than low! 3、 From the market development point of view, bitcoin parabola rise unsustainable, inevitable sharp reversal! Jesse Proudman, chief executive of the crypto hedge fund Strix Leviathan, said: “bitcoin is up 45% year to date at the end of last week and nearly 300% in the past three months. As we saw just now, the parabolic rise is unsustainable, and there will inevitably be a sharp reversal. ” Marouane garcon, managing director of amulet, a crypto to crypto derivatives platform, makes a similar point, pointing out that the market “should be adjusted.”. The law of market development is up and down concussion, it is impossible to only rise or fall but not rise! Bitcoin has been rising and breaking through for a month in a row. It is inevitable that bitcoin will fall. Moreover, under the stimulation of the rise, the market has been overbought. “Whatever you look at (fear and greed index, bearish preference, leverage, spot / futures benchmark, etc.), it’s overrated,” says Jeff Dorman, chief investment officer of Arca, a cryptocurrency hedge fund The bubble under the rise needs to adjust with the fall! Alex mashinsky, CEO of Celsius, believes bitcoin prices could fall all the way to $16000 by the end of the first quarter. CNBC host Jim Cramer said he still believed in bitcoin despite a $10000 price adjustment in the past three days. But, he added, he is unlikely to buy more bitcoin unless the price is below $20000. According to this logic, bitcoin’s callback is not over, and the fundamental reason for the sharp price drop is to buy and sell! On the one hand, in order to lock in profits, it causes selling pressure, resulting in a deep correction; on the other hand, the market purchase demand promotes the market to adjust automatically. Is the 17 year history of ox to bear repeated? This fall, the reason why investors are deeply worried, the biggest reason is to worry about whether history repeats itself! In the bull market of 2017, bitcoin set a bull market high in December, but then there was a downward correction, and then it turned into a bear completely! This fall was also a sudden drop after bitcoin reached a high of $41900, and the time node was similar to that in 2017. Therefore, many people are worried about whether this time, as in 2017, the bull market has come to an end and the bear market has arrived? In addition to the fact that the trend of this decline is similar to that in 2017, since bitcoin entered the bull market, its market development has overlapped with the previous bull market. Jiang Zhuoer has made a detailed comparison. And this fall, which is strikingly similar to that in 2017, has to make people worried that the bull market will be over if it does not escape the top or even increase the position? If so, how long will it take to stand on the top of the mountain to return to its original position? Many big V have made an in-depth comparison between this slump and 2017. The following is a different comparison chart: So, which one of these contrasts is what you want? According to Jiang Zhuoer, who has always been careful in analysis and accurate in prediction, this decline is the real development rhythm of the bull market: 1. At last, it has returned to the familiar bull market rhythm, slowly rising – collapsing wave – slowly rising – collapsing wave. I’ve been worried about it for a while. Why not collapse? If it doesn’t collapse again, if it rises to a higher level and collapses again, the destructive power (depth and duration) will be greater, which may interrupt the rhythm of the bull market. 2. According to statistics, the average decline of this bull market is only half of that of the previous round, and the average collapse rate of the last round is 40%. This round of bull market is only 20%. This may be due to the sharp decline in the volatility of bitcoin. ② It may also be because: there has not been a negative driven decline in the previous bull market. He believes that the current decline is at best the level of May 2017, which means that there is at least nearly half a year’s gain from the bull market’s peak. Even from another point of view, the current decline is the beginning of the bull market climax! For the strength of this callback, jiangzhuoer also gave a clear number: the bottom of this round of decline, the maximum probability is 28000 US dollars! The rising signal is not stagnant. Judging from the current market information and market logic, although bitcoin has a deep decline, the bullish signal is not stagnant. Although there will be some correction in the market, the prediction that bitcoin and many counterfeit coins will reach a record high after 2021 is still valid! Among them, the most important factor is the pressure of external economic environment, which brings opportunities to bitcoin. Robert Kiyosaki, author of “rich dad, poor dad,” says the incoming Biden administration is likely to start printing more money in its first 100 days. In addition, he expects President-elect Biden to nominate Janet Yellen as Treasury Secretary, opening a new era that could further weaken the dollar. As a result, Kiyosaki again advised traders and investors to buy bitcoin. Jim Cramer, the host of CNBC’s mad money program, recently also gave some suggestions on investing in bitcoin. “People no longer believe in fiat money, they think the United States is printing money But bitcoin did not. So it’s more valuable, just as gold is hard to find. We find that gold is growing, about 1% more than last year, that’s all So it’s about scarcity. ” He stressed that the dollar is not scarce, gold is a little scarce, and “bitcoin is completely scarce. In an age when people are afraid of inflation and don’t believe in government bonds or government, bitcoin suddenly has an appeal when you want something completely scarce. ” “The more people give bitcoin a higher price, the more likely they are to enter the bitcoin market,” he added As for Biden’s appointment, most people think that it will increase the economic stimulus measures, and the dollar will be released into the water, which will be more beneficial to bitcoin! Max Keiser, a Wall Street financial analyst and bitcoin supporter, tweeted that bitcoin’s price is now like a spring, and when it pops up, it will soon reach $65000. From this point of view, this slump did not affect our bullish confidence. In addition, from the perspective of market development, although the current callback has broken through many bottom lines, it is also possible to rise from the perspective of technology development trend. Recently, glassnode revealed that bitcoin’s adjusted dormancy flow has reached a crucial bullish threshold. The biggest reason for the bullish bitcoin lies in the development of its own value. After the risk aversion property of anti inflation, bitcoin has also made great progress in its own application. With the development of bitcoin market, the acceptance range of bitcoin is greatly increased, which promotes the development of bitcoin application. Following Lamborghini’s announcement to accept cryptocurrency payments, Patrick Hughes, a New York pub owner, is selling his two bars, hellcat Annie and scruffy Duffy, in exchange for bitcoin and Ethereum. Hughes said he was willing to sell it for about 25 bitcoins or 800 Ethereum. No matter from which aspect, there is no negative signal. Therefore, the long-term bullishness of bitcoin has not been damaged. Although there is the largest decline in the range and speed in half a year, the correction of sharp decline should be expected when the daily average volatility of bitcoin is 3.75%. Moreover, when bitcoin fell to 31000, the incremental rebound was very obvious, and the turnover rate increased significantly. This is the signal of the bottom of the short-term. If it can break through, the possibility of further rising will be greatly increased. Even if the bottom continues to dip, about 30000 should be compared to the bottom price! By the end of the article, bitcoin’s deep V rebound has formed, and the price has risen to $36338, with a daily increase of 13.43%. Therefore, the large probability should be closer to Jiang Zhuoer’s prediction!