Bitcoin continues to fall below $40,000. Is the bear market coming or is there something else going on?

Hello everyone, I am God K. I only like to study K-line. My friends call me “K-line maniac” and you can call me Lao K.

【K God said】

The weather has been unusual recently, please wear more clothes. New and old friends can follow the "Coin Circle Live" public account to prevent freezing. Yesterday, the market rebounded for a whole day, but it was destroyed by a single line at night. Today, it hit a new low again and continued to fall on the daily line. Why is this happening? Is the bear market coming or is there something fishy going on?

【News】

According to the news, Google plans to launch a commercial quantum computer by 2029. This news seems ordinary, but it actually caused an uproar in the technology circle. Although the arrival of quantum computers is almost inevitable, there has been no clear node in terms of time. With the announcement of Google's news, the impact of quantum computers, which seem to be out of reach, has gradually occurred. So will quantum computers impact Bitcoin? According to the computing power of quantum computers, it is easy to attack Bitcoin by 51% or crack the secret key. But is it really so? Quantum computers use two quantum algorithms, Shor and Grover. Although Shor can crack asymmetric encryption algorithms such as ECDSA, it can crack the private key through the Bitcoin public key. But the Bitcoin address is obtained by SHA256 and then hash160 of the public key, not the direct public key. This process cannot be cracked by Shor. Moreover, Shor cannot crack unused cold wallets. If it is cracked by force, a machine with 4.4 million quantum bits is required to reach a speed of 13.8 gigahashes per second, which is only one thousandth of the speed of our existing Bitcoin mining machines. Just like a spear and a shield, there is attack and there is defense. If we really enter the quantum era, developers will also follow the trend and switch to new encryption algorithms or fork upgrades, etc. So for this news, everyone just needs to understand it and don't be too nervous.

A joint announcement by the Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China shows that financial payment institutions are not allowed to conduct business related to virtual currencies.

The Shanghai Securities News published an article stating that if virtual currency is to be completely blocked, the relevant departments need to upgrade the technology at a deeper level.

Inner Mongolia has set up a reporting platform for virtual currency mining companies.

Data shows that 22,917 bitcoins flowed into the exchange within an hour yesterday. This hourly inflow volume can only be compared with the crash in March 2020.

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In the current market, do you feel strange, as if all the bad news is coming at you. It feels like you can't wait for Bitcoin to return to zero. In actual operation, it is not a bad thing for the financial market to release bad news at a relatively high level. The strength of the market that needs bad news to crash the market is obvious. If the market still falls after releasing good news at a relatively high level, then it is time to be vigilant.

【Technical Analysis】

Bitcoin hit a new low today, approaching the 40,000 USD mark. The entire market is now dominated by Li Ge, which is very scary. Why is it killed in this way?

For those who think the market has reached its peak, to paraphrase Carina Lau's line in Let the Bullets Fly, there is no limit to how many ways it can be killed. This kind of peak theory is not within our scope of consideration, because the shameless Lao K does not think it has reached its peak. As for the reasons, I have said them many times before, so I will not repeat them.

For die-hard bulls like Lao K, the main force's purpose of killing the market is very simple, which is to liquidate. The first period of the market rose too fast, too smoothly, and too fiercely. Basically, as long as you can lie down, you can make money, which is easier than Zhang Mazi making money. Now is the time to pay the price. This price is not paid in the spot, but in the contract. After several rounds of bull markets in the spot market, it is easy for everyone to summarize a rule, that is, no matter what kind of bear market you are in, as long as it is a bull market, you can set new highs and rise more, and the lows are gradually raised. In this case, it is very difficult for Brother Li to create a bear market again, because there are always buy orders from the later entrants. So what Brother Li has to do is to increase the holding cost of retail investors as much as possible, so the rise in the first stage is very fast.

As the rising trend line of the first stage fell, it announced the end of the first stage of the rise. What should Brother Li do at this time? He still raised the market cost, used the relative sideways trading, and even made a suspected head to give people a strong sense of bear market, so as to drive away those who made money in the first stage, and solidify the market cost in the area of ​​43,000-65,000 US dollars. Only when the overall market cost rises to this area, the resistance to the market pull in the future will be small. It should not be difficult to understand, right? For example, if the cost is 3,000 US dollars, then running at 6,000 US dollars will double the profit, not to mention the 60,000 US dollar line. But if your cost is at the 60,000 US dollar line, and it is pulled to 70,000 or even 80,000 US dollars, will you run? The higher the target of the future market, the more it is necessary to increase the overall market cost as much as possible to reduce the pressure of selling in the future market. So this stage can be understood as the cleanup of the profit-making plates in the first stage. Especially after seeing the strong effect of making money in the first stage of the rise, many people play copycat contracts to make as much money as possible today and tomorrow. Is it really that easy to make money? That's because Brother Li hasn't cleaned up the people yet. Now that they have dealt with the people, they have paid the price. This is why we have always told people to stay away from copycat contracts. As long as you don’t sell the spot, at best you will be very happy in the next bull market, but you can’t survive the next cycle of the contract.

From a technical point of view, the recent decline of Bitcoin is simply amazing. It is found that there will be pressure at every critical moment. As long as there are signs of rebound, it will be killed with one blow:

The above picture is the BTC 4-hour chart. You can see that every time the MACD crosses or is about to diverge upward, there is always an inexplicable suppression. No matter how good your shape is, no matter your support, it is directly destroyed by a negative line. Especially the trend before and after 20 o'clock yesterday, it is simply a game of heaven and hell. What does this mean? This shows that Brother Li is doing something, using his own chips and capital advantages to make every rebound of yours unsuccessful, thereby further suppressing the market.

We observe the coordination between indicators and prices since the bull market rebound:

It can be seen that since the 42,000 USD, the 4-hour MACD will go below the 0 axis. As long as the golden cross is formed and the market falls again, it will rebound after a new low or not. This shows that the 4-hour golden cross is the fair position of the market correction. So the current fair position here is actually the 45,000 USD line. The subsequent trend, including the part that is still going down today, is all fake. In the past, there was a quick rebound because Li Ge did not suppress the market. After Li Ge suppressed the market, it did not rebound at all. At the critical moment, there was a shuttle, so the market was gradually going down.

The 12-hour trend is more obvious:

In a strong market, most Yin and Yang parallel patterns will rebound, but here the Yin and Yang parallel patterns will destroy you directly without hesitation.

Yesterday during the day, there was a double bottom pattern at the 4-hour level. Then, the subsequent line was not suppressed much, and a subsequent rebound occurred immediately. Then, at the key acceleration choice, a negative line drew a door, which directly killed it, leading to today's new low.

Therefore, all of this is Brother Li’s way of suppressing the market and clearing the profits of the first phase, and it is mandatory. Brother Li is doing things, and ordinary people can only retreat.

However, we will notice that, including this morning when Bitcoin broke yesterday's low, the entire market was still very calm. Strong altcoins did not care about the decline of Bitcoin at all. You fall, I stay. This shows that the market's willingness to fall is not strong, but it is constrained by the trend of Bitcoin and cannot produce a trend rebound. There are only two possibilities in this case:

First, Bitcoin is no longer suppressed, and the suppressed market has ushered in an extremely fast and strong retaliatory rebound;

Second, the pressure on Bitcoin exceeded the market's psychological limit, leading to a more fierce and rapid short-term crash.

The first one is that the ancestor of Bitcoin is still suppressing the market. Only God knows when it will stop suppressing the market, so that is not within our consideration. We just need to wait, because the rhythm is not in our hands, but in Li Ge’s hands. The second one is that the pressure exceeds the market psychological critical point, which is relatively simple. In terms of form, the market support is 43,000 US dollars and 28,800 US dollars respectively:

The first psychological threshold of 43,000 USD was broken, but the market did not react, because there was a possibility of a false break. Hey, you can fall, I won’t fall, I will play sideways. Li Ge saw that he was quite capable, and then continued to hit it down, which is today’s trend. In this case, you should be able to see that some people in the market are gradually panicking. For example, when I write this article, the altcoins are gradually going down.

The second psychological threshold is the support of 28,800 US dollars. After breaking the first support, as long as the stop loss of the contract is not less than 28,800 US dollars, there will be a risk of being killed. Once this panic state has a chain reaction, it will explode violently. And Li Ge uses this great uncertainty in space to kill people.

For spot trading, it is a huge profit taking, or for those who have invested in the shock zone, it is a huge loss. These two situations will be more troublesome for people with unstable mentality, especially new retail investors, who also have a strong impulse to protect profits or stop losses, which will also be an uncertain factor in the market.

The current market situation is like standing by the swimming pool, and someone is in front of you, trying to kick you. Before the kick can reach you, you will fall into the water. It is the same when driving on the road. If someone's car in the lane next to you moves a little closer to you, the front of the car will move. If you don't see it, you may not see anything. If you see that the other car is not coming, your car may flip over. This is a question of mentality and will. In the current market, the competition is about who can endure more, or to use the words of those who do not agree with Lao K's Pixiu method, it is to be a cuckold.

Because Li Ge is in control of the rhythm, and in fact, the 45,000 USD line is the fair price. Only Li Ge knows where to stop in the future. For contracts, it is still the same old saying, you can only rely on luck, nothing else is useful. For spot, it is still the same old saying, the Pixiu is it. If you think the bull market has ended and reached its peak, then you can escape the top. If you think it has not ended, just keep waiting.

The market's extreme selling position, because we are not Brother Li, we can only say that the limit cannot be broken through the hidden backdoor in the above picture, and any other position may become a Jedi counterattack position, and a shocking reversal may be staged at any time - as long as Brother Li is willing. As for the problem of the daily 179 line breaking and the monthly average line piercing, under normal circumstances, if Brother Li does not suppress the market, the market will naturally not break if it develops on its own, but now it is obvious that Brother Li is making trouble. This kind of inducement to short, it can be broken anywhere, and it will not count, so don't worry about these details, just wait.