58 Academy TIM: Causes of this bull market and future market forecasts (Part 1)

Since the end of September, in less than two months, Bitcoin has risen by more than 90%, and hit a new high of 19482 on November 25, just one step away from the all-time high. So what is the cause of this bull market? How will BTC and ETH trend in the future? In the bull market, what are the precautions for contract trading? On November 26, Mr. TIM, a senior data researcher at 58 Academy, analyzed from a professional perspective and supported by a large amount of data, predicting that ETH will continue to attack the 1400 mark in the next few weeks, and boldly predicted that Bitcoin will reach $100,000 per coin within two years.

This round of bull market is an “institutional” bull market

As for the reason why Bitcoin broke through the highest level of the year, TIM said that the fluctuation of Bitcoin is cyclical. According to the historical cycle law, a bull market will appear after the halving or in the next year. The first two halvings in history have this characteristic.

According to historical data, the price of Bitcoin increased by 1800% after the first halving in 2012. The price of Bitcoin increased by 2200% after the second halving in 2016. Because the block reward is reduced by half after the halving, the block reward will be reduced from 12.5 to 6.25 after the third halving in 2020. The inflation rate will drop from 4.17% to 3.57%. Bitcoin will become increasingly scarce, and scarcity will increase its value. Therefore, the halving of Bitcoin has been proven to be the main reason for the Bitcoin bull market.

However, in this round of bull market, only Bitcoin has emerged from the bull market pattern, breaking the highs of 2018, 2019, and 2020 in succession, and approaching the historical high in 2017. Other currencies have performed mediocrely, basically rising passively, and no universal bull market has formed. Therefore, in theory, this round of bull market is an institutional bull market, and it is a solo performance of Bitcoin.

TIM particularly emphasized that this round of bull market has the following two differences compared with the previous two:

First, the bull market is in a different context. In 2020, the global pandemic raged, and central banks of various countries released money without limits, leading to global inflation, negative interest rates, and the closure of a large number of companies. In 2020, the "3.12" black swan event affected Bitcoin's global liquidity crisis, and its price quickly fell from $9,000 to around $3,800. However, with the impact of the expected halving of Bitcoin, Bitcoin quickly pulled back to $10,000 in two months.

Compared with gold and S&P, Bitcoin's performance throughout 2020 has been exceptionally eye-catching. Whether it is for investment or risk hedging, Bitcoin is definitely the first choice this year.

Second, the Bitcoin market makers have changed hands, with financial institutions becoming the new main players.

As we all know, Bitcoin miners are the first echelon of the currency circle. With a computing power pool of up to 10,000P, miners can earn huge profits from block rewards, and they have played an absolute leading role in the first two halvings. However, after the third halving, the profit generated by miners at the same cost was reduced by half. The share of Bitcoin miners in the entire network also plummeted, and this situation will become more and more obvious with the fourth halving. On the contrary, this year we can see that Wall Street financial institutions have been increasing their holdings of Bitcoin and other cryptocurrencies. Some countries and regions even directly reserve Bitcoin as a sovereign currency, so in the future, financial institutions will have an increasingly greater impact on Bitcoin prices.

ETH will hit $1,400 in the next two weeks

Regarding the trend of Ethereum, Mr. TIM pointed out that in the bull market of 2017, ICO fever broke out, and Ethereum, as the protagonist of the story, went all the way from $450 to the top in just 43 days, breaking through $1,400, and directly becoming a god. With the arrival of ETH2.0, it can be seen that the powerful Ethereum community completed the start-up funds needed for the ETH2.0 beacon chain within a few days. Never underestimate the power of the Ethereum community.

According to on-chain data, since the launch of ETH2.0 on December 1, the number of addresses with at least 32 has reached 126,852, setting a new record high. At the same time, the number of addresses holding 10 or more has also hit a record high. Retail investors and validators are increasing rapidly.

From the perspective of Ethereum transaction volume, the current Ethereum transaction volume has basically reached the level before the 2017 bull market Ethereum outbreak, and the transaction volume has been steadily rising since November.

Therefore, whether it is the stimulation of ETH2.0, the huge increase in on-chain addresses and the increase in transaction volume, Ethereum has the conditions to hit the high before 2017. History is always surprisingly similar, and it can be expected to continue to attack the 1400 mark in the next few weeks.

So what should we pay attention to when trading contracts in a bull market? For investors who missed out on this round, is it too late to get on board now? What will be the trend of Bitcoin in the future? Welcome to "58 Academy TIM: Causes of this round of bull market and future market forecasts (Part 2)"