After a slump in the evening yesterday, although the market seems to have stabilized in the US market, the new round of plunge this morning has almost shattered the hope of a short-term bullish counterattack. As of the time of writing, Bitcoin cash was the lowest in the market. It dropped to 145.
The avalanche of the global financial markets continued overnight, and the stock markets of many countries continued to plummet. The Dow fell 10%, the biggest one-day drop since Black Monday in 1987. The spread of major currency swaps expanded, and the precious metals fell across the board. Diving at $ 80 fell below the 1600 integer mark; Brent crude oil again experienced a single-day drop of up to 8%, and a large number of cheap supplies from Saudi Arabia and the United Arab Emirates poured into the market, exacerbating price pressure.
At the same time, the CNN fear and greed index yesterday ’s initial reading of the US disk was 2, which was a record low, indicating that the market is currently in a state of extreme fear and the level of fear has reached the level of the 2008 financial crisis. And the Chicago Board Options Exchange (CBOE) VIX panic index also skyrocketed by nearly 30%.
Against the background of the rapid fermentation of market panic, the diving of risky assets seems to be "reasonable," but the short-term plunge of gold in the short term is well worth pondering. As a safe-haven asset with absolute consensus, the truth of the "turbulent world gold" has been circulating for thousands of years, and in this environment of panic outbreaks, gold did not rise all the way, but was obviously frustrated and fell. What is the reason for the large-scale selling? Then? The problem ultimately falls on the word "liquidity" .
Liquidity risk refers to the risk of failing to complete the transaction at the ideal point due to insufficient market trading volume or lack of counterparties willing to trade. Liquidity risk is generally due to the negative effects of other risks. In extreme cases, liquidity risk is sufficient to bring down large banks and make them bankrupt. In addition, liquidity risk means that the value of short-term assets is not sufficient to meet the payment of short-term liabilities or unexpected capital outflows. This shows that the better the liquidity of the assets, the more "easy" it is to deal with the crisis. In general, the better the liquidity Assets are more resilient. And liquidity risk may appear in all markets.
When all assets crashed collectively, the voice of "cash is king" spread again in the market. The lack of cash in the hands of investors will inevitably trigger a new round of selling demand, while traditional safe-haven assets such as gold, which has been strong before, have naturally fallen under the influence of this "active selling" demand. In simple terms, everything that can sell money may be sold for cash, and this round of bitcoin diving in Bitcoin is also a result of this.
In the past month or so, the trading volume of major cryptocurrency trading platforms has shrunk significantly, showing that the cryptocurrency market itself has always had liquidity problems. After a short run of concentrated runs, the price of coins is prone to extreme fluctuations. In addition, the increasing leverage of the cryptocurrency market has further increased the risk of changes in this unstable market. Once the market quickly rises or falls, a large number of leveraged contract explosions will further increase the one-way market. Kinetic energy, and under the "multiple forces", we have got this amazing market performance in the past 24 hours.
The performance of traditional financial markets in the recent period has become more and more similar to that of the last financial crisis in 2008, and more and more top investment banks have begun to "preheat" a new round of recession. Some analysts pointed out that if the financial crisis erupts completely, the bad external environment combined with the upcoming reward halving will likely cause more than one-fifth of the miners to be "unemployed." And the market's cautious attitude towards risky assets during the crisis stage will also lead to thin buying support in the cryptocurrency market, and the risk of further price dip should not be underestimated.
However, it is worth emphasizing that the large amount of cash hoarding has not been a situation that market participants are willing to face for a long time. It is foreseeable that at some point in the future, investors will inevitably start buying again with cash on their hands. All kinds of assets. For everyone in the market, the key question is how long this psychological construction will take, in fact, how long the new round of "recession period" will last.
Maybe when we look back at this history many years later, the cryptocurrency market can show some unexpected performance in the first real financial crisis experienced since its birth, but at least at this moment There are very few people who are willing to believe that Bitcoin can go smoothly. Is Hodler's faith strong enough?
