Bitcoin breaks through $10,000, hitting a 80-day high

“When I woke up, the cryptocurrency world went crazy again.”

At 7:45 am on May 8, QKL123 data showed that Bitcoin finally broke through the $10,000 mark, returning to $10,000 since it fell below the mark on February 19.

Meanwhile, Bitcoin's rally continued to expand its gains since the March 12 crash. On March 12, the price of Bitcoin fell from nearly $8,000 to $4,300, causing heavy losses to investors.

The blockchain revolution is back

“It’s already 10,000!”, “The blockchain revolution is back again”, people posted pictures on their WeChat Moments early in the morning and spread the news.

Some people even created the term "waking up in the morning" to express the excitement of being woken up by the rising price of Bitcoin in the morning.

Multiple Bitcoin market WeChat groups are starting to get lively.

Some people "all-in" successfully and excitedly posted their contract orders in WeChat groups to show off. Others saw their profits break through 10,000, but "missed out" along the way.

The sharp trend of Bitcoin even makes the "old waves" admire it.

“Old investors who have experienced the 3,000+ in early 2019 can’t believe their eyes. The V-shaped reversal is really here!”

A Tokenfund that has been silent for a long time could not contain its excitement and posted a picture of the market price rising above $10,000 on WeChat Moments, with the caption: "Wait till the clouds clear and the moon appears."

Why did it go up again?

In fact, the reasons for the rise of Bitcoin are well known to everyone in the cryptocurrency circle. They are the same over and over again: big players are bullish, institutions are increasing their holdings, halving market, and cooperation from the external market, etc.

There are many examples of bigwigs singing bullish. For example, on the morning of May 8, a message came: Paul Tudor Jones, founder of Tudor Investment and a well-known macro investor, said he was buying Bitcoin. He believes that cryptocurrency assets can resist inflation caused by central bank money printing. Jones told his clients that Bitcoin is similar to gold in the 1970s.

This news was reposted by many people on WeChat Moments, almost at the same time as Bitcoin broke through $10,000.

Grayscale is the most well-known institution to increase its holdings. Data shows that from the beginning of the year to date, Grayscale's BTC positions have continued to rise. Such strong buying has well supported the rise in the price of the currency.

According to the analysis of Carbon Chain Value Research Institute, Grayscale's Bitcoin Trust Fund GBTC has purchased 68,395 BTC since the beginning of 2020. In addition, Square's Cash App earned $306.1 million in Bitcoin in the first quarter of 2020. Among them, the company earned a gross profit of $7 million from Bitcoin sales. In the first quarter of 2020, Grayscale and Cash purchased 50% of the total mining volume of Bitcoin miners.

The strong purchasing power of institutions made retail investors sigh, "Grayscale bought half, Square bought half. Then the newly issued Bitcoins were gone. How could it not rise?"

OKEx Chief Strategy Officer Xu Kun interpreted the second round of market conditions from a professional perspective.

Xu Kun said:

Despite the turmoil in the global market in the first quarter, more and more people began to hoard Bitcoin, and the investment value of Bitcoin was accepted by more people. Bitcoin also rebounded rapidly within one month, with a year-to-date return rate of nearly 20%.

(1) Currently, there are more than 2,000 whale addresses holding more than 1,000 bitcoins, exceeding the peak level of the 2017 bull market. The number of addresses holding more than 0.1 bitcoins has also hit a record high, exceeding 3 million, and more people are starting to hoard bitcoins.

(2) Institutional investors are also increasingly interested in Bitcoin. Grayscale's Bitcoin Trust product hit a new high in investment in the first quarter, receiving approximately $389 million in investment. It currently holds approximately 311,000 Bitcoins, accounting for 1.7% of the total Bitcoin circulation. The Medallion Fund under the quantitative giant Renaissance Technologies is also considering investing in Bitcoin futures.

The halving market is mainly explained from the supply and demand theory. After the halving of Bitcoin, the supply decreases, and the demand remains unchanged, which provides support for the price increase. However, the short-term impact of the halving of Bitcoin on the price of the currency is difficult to predict.

In the external market, although many institutions have been bearish on the US stock market, the overall performance of the US stock market has been good recently. Yesterday, the US stock market closed, and the three major indexes opened higher and maintained their gains. The Dow Jones Industrial Average closed up 0.89%, the S&P 500 rose 1.15%, and the Nasdaq rose 1.41%. Gold stocks and oil stocks performed strongly. Even Brent crude oil futures have stopped falling. You know, a few days before the "3.12" crash, the US stock index and crude oil futures were very bleak.

Xu Kun believes that the digital asset market will rebound faster than the traditional market and enter a longer bull market, which is an opportunity that we cannot miss.

The beginning of a bull market or the beginning of a stranglehold?

"Don't get excited, this is just a new wave of meat grinder market, small retail investors will be crushed by the Whale United Exchange without leaving any residue!"

Some people are excited, while others pour cold water on it.

Glassnode data shows that the number of whales holding more than 1,000 BTC continues to increase. They have been in a stable accumulation mode since January, unaffected by the economic collapse caused by the COVID-19 pandemic, showing a macro bullish trend.

If this round of rising market benefited from the hoarding of giant whales, then the time when the giant whales sell should also be the time of decline, and retail investors who chase the rise and fall will naturally become prey.

Regarding contract data, Xu Kun said, "From our trading big data, although the contract open interest has not yet reached the level before March 12, it has also been on a steady upward trend recently."

OKEX's BTC elite long and short average position data shows that the average long position ratio is less than the short position. According to the casino's convention of "7 losses, 2 draws and 1 profit", this means that the rising trend is not over yet.

"There are still a lot of shorts in the market. We will push up the price until the shorts are convinced." said an investor.

According to Coin data, the entire network has seen a liquidation of US$220 million in the past 24 hours, most of which were short orders.

The question is, there are still 3 days before Bitcoin halving. BTC has broken through 10,000 US dollars at this time. Is it the starting point of a bull market or the beginning of a new round of killing of retail investors?