Bitcoin plunge: Some investors see Chinese market makers regaining control of Bitcoin prices

Bitcoin plunge: Some investors see Chinese market makers regaining control of Bitcoin prices

[ Bitcoin plunge: seen by some investors as Chinese market makers regaining control of Bitcoin prices ] In the past three days, Bitcoin has experienced the first wave of price declines after the resumption of trading in China's on-site market, which is seen by some investors as Chinese market makers regaining control of Bitcoin prices.

After hitting a new high of 21,000 yuan, Bitcoin experienced a decline of more than 14% around 6 p.m. on June 12. According to data from OkCoin, the price of Bitcoin fell below 18,000 yuan in the early morning of June 13. After that, at 2 p.m. and 9 p.m. on June 15, the price of Bitcoin fell twice again, with the lowest point falling below 17,000 yuan. As of June 16, the price of Bitcoin gradually stabilized at around 18,000 yuan.

Several investors provided some relatively consistent views to the Economic Observer: This wave of decline is actually the result of domestic trading platforms trading on the spot market to short the futures market after reopening the on-site trading. As a supporting evidence, some big investors have already learned in advance that the price of Bitcoin is about to fall.

Some investors view the drop in Bitcoin prices in recent days as an event in which domestic market makers have regained the pricing power of Bitcoin. In the view of these investors, before this, due to the suspension of Bitcoin on-site trading, Chinese Bitcoin traders had to turn to the over-the-counter market, and the premium and statistical problems in the over-the-counter market temporarily made the market makers lose the ability to influence prices by inflating volume.

Jia Guofei, an investor who previously represented Bitcoin sales, provided another view to the Economic Observer. In Jia Guofei's view, Chinese market makers have never lost their pricing power, but the market has been rising all the way and it has not been reflected. The current decline is the result of the market makers' operation at the right time. "The market has been rising all the way, and for the market makers, it is much easier to short than to go long," Jia Guofei told the Economic Observer

OkCoin analyst told Economic Observer that it is not advisable to participate too aggressively in the current market, and short-term trading is the main focus. The focus on the upper side of the day is the 20,000 yuan integer mark, which can be regarded as the intraday long and short watershed. As long as the price cannot effectively break through, the short-term pattern will not change; the support below can focus on the 16,300 yuan-17,000 yuan area.

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Bitcoin plunge: Some investors see Chinese market makers regaining control of Bitcoin prices

The sudden drop

[ Bitcoin plunge: Some investors see it as Chinese market makers regaining control of Bitcoin prices ] At 6 p.m. on June 12, Bitcoin prices experienced a sudden drop. Around 10 a.m. on the same day, according to data from OkCoin, Bitcoin prices had just broken through a high of 21,000 yuan.

Bitcoin investor Jia Guofei predicted this round of decline by judging the market data. In his opinion, the current Bitcoin market is overbought. Therefore, he began to short the Bitcoin price on an overseas Bitcoin trading platform that afternoon. In this round of Bitcoin decline, Ah She made a profit of nearly 100,000 yuan.

OKCoin analysts told the Economic Observer that the bitcoin price fell after breaking through the historical high of $3,000 on June 12, indicating that the large amount of profit-taking accumulated in the market is becoming unstable, and some profit-taking is cashing out. Although the current price has rebounded after hitting a low of around 17,900 yuan, the trading volume is limited, indicating that the active buying power is insufficient.

The Bitcoin futures market is considered to be the key to this round of Bitcoin price decline. The current Bitcoin futures market can short or long the trend of Bitcoin prices. In the view of some investors, the reason for the price drop is that some investors chose to dump the spot market in order to make a profit by shorting in the futures market, thus affecting the trend of Bitcoin prices.

Some investors see this price drop as a sign that Chinese market makers have regained the pricing power of Bitcoin. As a global digital currency, the price of Bitcoin is formed based on the price of global Bitcoin transactions. However, in 2016, due to the particularly active Chinese market, Chinese Bitcoin investors had a more obvious impact on the price of Bitcoin. As a supporting evidence, after the central bank's inspection of Bitcoin trading platforms at the end of 2016, the global Bitcoin price fell significantly.

After that, China's on-site bitcoin trading was suspended, the bitcoin trading center moved to Japan, and the over-the-counter price closely followed South Korea. "The style of the Chinese market maker is very obvious this time, which shows that after the on-site market opened, the influence of the state-owned market on the price has been restored." A bitcoin trader told the Economic Observer.

There are also some more powerful players entering this market. A quantitative investor in Bitcoin once told the Economic Observer that some domestic private equity institutions have already set their sights on the Bitcoin market. Previously, a private equity institution had hoped to allocate hundreds of millions of yuan in funds in the Bitcoin market through this quantitative investor. Another investor who has been paying close attention to the Bitcoin market told the Economic Observer that some foreign hedge funds have also set their sights on Bitcoin.

Bitcoin plunge: Some investors see Chinese market makers regaining control of Bitcoin prices

Digital currency investors: 50% profit in half a month

[ Bitcoin plunge: Some investors see it as Chinese market makers regaining control of Bitcoin prices ] In recent times, Bitcoin is not the currency with the highest increase. Many other digital currencies have increased far more than Bitcoin. Taking one of the more mainstream digital currencies as an example, in the past six months, the price of Ethereum (a digital currency) has increased by more than 50 times. On June 15, as the price of Bitcoin fell, the price of Ethereum also fell.

The six-month-long upward trend has brought great benefits to Bitcoin and other digital currency investors. An investor who considers himself conservative and prudent has made a profit of more than 50% in less than half a month since the beginning of June.

In the opinion of this investor, if the current increase in all digital currencies is taken into account, the funds entering this market are still expanding rapidly.

But risks still exist, and the biggest risk lies in the direction of regulatory policies. According to relevant reports, the central bank is currently formulating two regulatory policies on Bitcoin, one on anti-money laundering regulations and the other on relevant rules for Bitcoin management. Although some investors are increasingly optimistic about policy supervision - this optimism stems from the increasing number of positive reports on Bitcoin in media reports in the first half of this year - the documents have not yet been issued, and in the Bitcoin investment circle, some investors have begun to reduce the number of Bitcoins they hold.

Earlier, there were reports that the central bank would issue relevant management regulations for Bitcoin in mid-June. However, on June 15, Sun Hui, deputy director of the central bank's Shanghai headquarters, said at a press conference on "Preparation and Main Activities of the 2017 Lujiazui Forum" held by the Shanghai Municipal Government Information Office that there is currently no news about the issuance of Bitcoin regulatory documents in June.

The above-mentioned investor also believes that now is not the best time to invest. "It is not the time to make money now. If you have investment intentions, you should wait a little longer," the investor told the Economic Observer.