Bitcoin Surges above $5,000, but the Bull hasn’t Come Yet
The price of Bitcoin surged above $5,000 for the first time this year, leading other major cryptocurrencies turned green. The collective market surged and broke the $140 billion mark for the first time in a week. Many investors suffered from the crypto crash rekindle their hopes and believe the bull market is coming back. However, it may not be the case in some sense.
For example, Zhao Dong, one of China’s most influential Bitcoin billionaires and a famed OTC trader holds the opposite view on this. Zhao repeated “This is not a bull market” triple times in a Weibo post.
He stated that the bear market would wear down people’s patience, the bull market should come after most of the investors fail to HODL and leave the market.
In Zhao’s argument, the bull market has been defined as the stage when the actual market value exceeds the rational valuation driven by the external funds, which also known as the bubble stage. At that time, the bullish market performance will be spectacular, far beyond the current market performance, and last for a longer time.
Zhao believes that a bull market like that will come 2 years later.
According to 8BTC, the recent 20 to 50 percent daily gain would not last for long. Various index the current uptrend is driven by the exchange-traded capital. It is more like a market-correction, a rational regression period rather than a bull run.
It just likes the period from January to November 2015. Bitcoin market cap increased from $2.5 billion to $4.58 billion during this time. This is a rational regression period that consisted of the rebound period and the consolidation period.
Currently, the market cap increased by 57.1% rebound from the bottom of $56.2 billion to $88.3 billion, which account for 83 percent of gains in the regression period in 2015.
Accordingly, Bitcoin has ended its bear trend and enters the rational regression period. During this time, we may see frequent increases and declines in Bitcoin price within a small scope, which may last for a while, maybe 6 to 12 months, maybe even longer.