Bitcoin breaks 10,000, how far are we from a bull market?

The last time Bitcoin broke through 10,000 was in June, and it fell just after it touched 10,000. This time, Bitcoin broke through 10,000 US dollars and 11,000 US dollars in two days, and the market sentiment finally changed from hesitation to bold cheering, and by the way, it was ranked 10th on Weibo's hot search.

Unlike the previous times, the market atmosphere this time is particularly lively. First, the DeFi sector collectively soared, and a small group of people got on board to stir up the market FOMO sentiment; then ETH soared to $332, setting a new high in nearly a year. Those who play the sector, mainstream copycats, and big pie all gained, and the market finally achieved a fair share of benefits.

Despite the excitement, some common questions arise: How is this Bitcoin breakout different from the past? How long will this wave last? Is this the dawn or the afterglow?

1. Is this time’s breaking of ten thousand different from the previous ones?

1. On-chain data

In the previous article, we mentioned that the number of coins destroyed per day is an indicator of the real activity of the Bitcoin network and the market selling pressure. The increase in the value is either due to the increase in the number of Bitcoin transactions or the re-activation of dormant wallets.

As can be seen from the figure below, the daily coin destruction values ​​were very high when the price broke 10,000 for the first two times. After that, the price of Bitcoin fell directly, giving people the feeling of a scam.

This time, the coin-day destruction value has not increased. Obviously, compared with the previous wave:

1. The car is lighter, and fewer and fewer players are eager to get out of it;

2. Everyone has strong expectations for the future of the currency market.

(Orange line: coin destruction, black line: Bitcoin price)

2. Market environment

The biggest difference is the market environment. The confidence in the cryptocurrency industry that was destroyed by the 312 incident is now being rebuilt bit by bit.

DeFi has completed the journey of the past year in just two months, with its market value quadrupling to US$4 billion. The average increase in the entire sector is more than 230%, and the average increase in DEX is 5 times that of CEX. Monster coins such as YFI have increased by more than 1,000 times.

Ethereum, as the largest platform of DeFi, has finally broken through the resistance and reached $300, returning to its high point a year ago, under the explosive growth of DeFi. Other mainstream altcoins have also seen a 20% increase in the past month. Players who failed to understand DeFi and could not get on board have also found a balance in this wave of market.

Secondly, the external market environment, the global money supply is still going strong, international relations are becoming increasingly tense, and investors are in urgent need of a safe haven. The recent rise in gold and silver prices is a good proof of this. Today, the rise in gold prices has not seen any signs of ending. As a non-mainstream safe-haven asset, Bitcoin will be more or less affected. After all, a little bit of meat from an $8 trillion plate is enough for Bitcoin to eat for a long time.

2. Bull market, is this what it feels like?

Every time the price of Bitcoin breaks 10,000, the traditional media always blows the trumpet louder and more exaggerated than the cryptocurrency circle. In its recent mid-year report, Bloomberg directly called for more , saying that the price of Bitcoin will soon rise to more than $12,000.

Everyone hopes that Bitcoin will rise, and the media is right to say that it is bullish. However, has the long-awaited bull market really arrived?

On this issue, opinions in the industry are extremely polarized .

The "bull market has not come yet" group believes that it is too early to call for a bull market now. The current market is a stock market and the market is only rising in the short term. The super bull market like 2017, where the price rose from more than 3,000 US dollars to 20,000 US dollars in 3 months, is still far away.

The “bull market is coming” group is more direct, saying that if Bitcoin rose from $3,500 to $11,000, everyone would have shouted about it long ago. The founder of the cryptocurrency super casino BitMex was even more direct, shouting on Twitter: This is a fucking bull market!

The reason for such a big disagreement is nothing more than that everyone has different definitions of the concept of "bull market in the cryptocurrency circle."

Some people take breaking through the previous high of 20,000 US dollars as the standard, some think a 3-5-fold increase is enough, some insist on waiting for a large number of outsiders to enter the market, and some say that it is bullish only when everything you buy rises.

The evaluation criteria are varied, so it is useless to argue about this issue now. In the end, it will all come back to the prediction game of "will the price rise or fall in the future?" which everyone can participate in.

In fact, it doesn't matter whether it is a bull market or not. The time will come naturally. The best way is to cultivate inner strength and make money. The bear market is cruel, but it also squeezes out bubbles and gives everyone enough opportunities to get on board; the bull market is thriving, and gambling attributes are injected into the market. For ordinary people, the probability of losing money in the bull market is actually greater.

What we are pursuing is not the ability to make "super predictions", but the ability to have a "decision-making system" and maintain it, to be decisive when it is time to advance and to not hesitate when it is time to retreat, so that you can avoid being carried away by FOMO and losing everything, and also allow you to "happen to be there when the lightning strikes."