Article In December 2020, amid the controversy over value confirmation and bubble doubts, BTC broke through its historical highs and climbed to a new high of $20,000 after experiencing a journey from $19,000 to $3,000.

In January 2021, BTC exceeded its previous high by 2 times, reaching $42,000, and then fell back to around $30,000.

In February 2021, BTC once again broke through $42,000, $50,000, $55,000, and $57,000, facing the incredulous eyes of the world...

On February 21, 2021, BTC encountered resistance and fell to around $55,000 on its way to $58,000.

The question is, is it a small correction? Or has BTC peaked? Is it still possible to buy BTC at such a high price?

Some bigwigs have already started not to recommend small retail investors to buy BTC:

❖Insights from trading volume❖

Bee still says that trading volume is the most real indicator. Prices can be manipulated, but trading volume requires real money to participate. Every $1 in trading volume means $1 in liquidity.

➤Transaction amount

When it comes to trading volume, the most intuitive way is to observe the K-line chart. This is the hourly chart of BTC. It can be seen that at 6 o'clock this morning, BTC fell the most, and a relatively higher trading volume was generated at this time.

Of course, strictly speaking, the candlestick chart shows the transaction amount rather than the transaction volume, which is measured in currency.

The price is falling, but the transaction volume is increasing, which means that relatively more funds are buying BTC, resulting in the decline of BTC being hindered.

When the price falls, there is still a lot of funds buying BTC, which reflects the market's confidence in BTC.

Let's take a look at some other mainstream currencies, this is ETH:

This is DOT:

This is BNB:

Several mainstream currencies also generated large trading volumes when prices fell, indicating that investors still have confidence in the currency and the currency market.

In fact, novice investors often experience FOMO when prices are high, while experienced investors often like to wait for periodic corrections and look for opportunities to buy in.

This is why William does not recommend small retail investors to buy BTC. He is not pessimistic about BTC, but buying BTC at a higher point. Some small retail investors, especially those who are new to cryptocurrency, always have a bad mentality, and the result may be that they may lose money instead of making money.

➤ Trading frequency

It has been a long time since Little Bee has counted this indicator. Little Bee has established its own indicator - trading volume to market value ratio, which uses the daily trading volume divided by the market value to reflect the trading frequency.

This indicator can first eliminate the impact of price fluctuations on trading volume. After all, the price of BTC fluctuates greatly every day.

Second, the impact of price levels can be eliminated. On different dates, because BTC is not at the same price level, the so-called transaction volume (actually the transaction amount) cannot truly reflect the number of BTC transactions.

Second, the impact of the additional issuance of BTC can be eliminated. After all, a certain amount of new BTC is produced every day. Currently, about 900 new BTC are produced every day.

Let’s look at the chart compiled by Little Bee:

In March 2020, the price of BTC fell and the transaction frequency surged, reflecting the panic in the market. On the one hand, a large amount of BTC was sold, and on the other hand, a large amount of BTC was bought.

In September 2020, BTC hit $12,000, and then fell sharply after reaching $12,000. At that time, Defi coins such as SUSHI were rising wildly, while mainstream coins such as BTC were relatively mediocre. At that time, the trading volume also increased, and there was also market panic, with a large amount of selling and buying.

In January 2021, BT had a callback, and the trading frequency was relatively high. However, this trading frequency was still very low compared with the previous two times. So soon, BTC continued its upward trend after a callback for half a month.

In fact, in December 2017, BTC also had a similar pattern.

However, observing the current BTC, there is no obvious increase in transaction frequency. On the contrary, the transaction frequency has been decreasing in recent days. However, the price of BTC has been rising in recent days.

This shows that the buying power is more dominant, while the selling power is not much. BTC holders still have higher expectations.

To see it more clearly, let’s look at the chart since 2021:

BTC has been rising in recent days, while the transaction frequency has been decreasing.

The trading volume reflects the consensus between the bulls and bears. The decrease in trading volume and the increase in prices reflect that the power of the bears is weakening, and therefore the consensus between the two sides is weakening.

Then the little bee went to check the trend of gold:

Gold began to rise around March 2020 and continued to rise until early August, with a rising cycle of nearly 5 months.

Although BTC was also rising at the same time, BTC also plummeted in March, while gold did not fall as much. Therefore, the period from March to August was a time of gold rising, but a time of BTC recovery.

BTC's real rise began in October. It rose slowly from October to December, and has only risen rapidly since December. In the meantime, it has even had a correction for half a month.

The revelation that gold brings to BTC is:

First, in a hyperinflation environment, the reason why gold prices first rise and then fall is that the price of gold would have risen under inflation, but this affected expectations and caused gold prices to rise faster and more, thus forming an expectation bubble, and after the bubble, there was a certain degree of decline.

Second, gold rose for 5 months, while BTC only rose for 4 months.

Third, BTC is different from gold. The rise of gold is more due to inflation and the market's expectation of inflation. There are two fundamental reasons for the rise of BTC. One is inflation, and the other is the consensus of BTC's 4-year cycle and the BTC consensus bull market in 2021. Of course, there will be bigger bubbles on top of these two factors.

Therefore, BTC should not have reached its peak yet.

❖Institutional revelation❖

Why did Tesla buy BTC? Does Tesla want to speculate in cryptocurrencies? Why did Grayscale buy cryptocurrencies? Is it because Grayscale’s retail investors and institutions want to speculate in cryptocurrencies?

It cannot be denied that all people and organizations are profit-seeking.

However, the purchase of BTC by these institutions once again confirms the two fundamental reasons for the rise of BTC mentioned by Little Bee earlier, one is inflation, and the other is the consensus of BTC.

Institutions buy BTC for risk aversion and also join the BTC consensus camp.

Here are the public companies currently holding BTC:

Tesla's average BTC cost is $32,000, and it is possible that it was bought during the pullback in January. As I said before, new investors are prone to FOMO and like to enter the market at high points, but old investors like to wait for a phased pullback. Institutional investors are obviously more mature than old investors, so when BTC pulls back, there is a possibility that institutional funds will enter again. Of course, it is just a possibility.

❖Written at the end❖

The revelation of trading volume is that the trading volume increases while the currency price falls, and a lot of funds are bought at the low point; the price is rising, while the trading frequency (trading volume/market value) is decreasing, which shows that the consensus between the long and short parties is declining, the buying power is dominant, and the selling power is getting weaker and weaker, which shows that market expectations have not peaked.

The revelation of gold is that the reasons for the rise of BTC and gold are not exactly the same. In addition to inflation, there is also the consensus drive of BTC itself. While gold has been rising for 5 months, BTC has been rising for at most 4 months.

The revelation from the institutions is that BTC’s ability to avoid inflation and its value consensus have been recognized by some institutions.

So, at the high point of the BTC space, do you think BTC is still worth buying?

Finally, a reminder of the risks. This morning, BTC experienced a certain correction, falling to more than $45,000. Generally, the decline may not be just one wave. Observe the K-line of BTC and other currencies in the previous screenshot. There is a small rebound after the correction, but the trading volume during the rebound is not large, and the current upward force is not strong. In addition to BTC, if other currencies follow BTC's correction, their decline will be greater.

All articles are original, good or bad, originality is not easy, please indicate the source for reprinting: TVB on the chain