Based on the complexity of the current market, thinking about the next round of the bull market is not just looking at the rise and fall of the secondary market, nor the price height of a currency. Need to see the evolution direction of people, enterprises and organizations in the industrial cycle and industrial structure. Drive away the fog, cross the bull and bear, and see the light of the bull market.
For many people in the industry, although they understand the attributes of the industry, they have never experienced a financial cycle. Whether it is an old man in the industry or a newcomer, we all hope that the industry will be evergreen and look forward to the round-by-round bull market. What factors will be needed for the bull market to come?
Supply and demand in the secondary market
The climax of cryptocurrency prices has formed a bull market, which is mainly manifested in the skyrocketing currency prices and the explosion of tokens, but for the secondary market, the basis is the main course of action.
Most people who have previously participated in the stock market know the terms bull market and bear market. The bulls and bears of cryptocurrencies are the same as the principles of the stock market, and the main experience is the price. The essence of stock market prices, or fluctuations, is the change in supply and demand in the trading market.
The logic of supply and demand determining prices is established based on transaction methods. The purchase order in each exchange is from an individual account to another account. Each transaction is an independent transaction process, and the transaction price of this transaction process is the stock price or currency price at this time. . Therefore, the rise and fall of the entire market is a combination of several orders. This is like a physical trading market, where every single purchase and sale synthesizes the whole market economy.
Similar to the logic of physical transactions, when the supply-demand relationship between buying and selling changes, the panic buying will push both buyers and sellers to think that the value for money and the price increase, and a large number of sell-offs also mean that the value is not worth the price and the price falls.
Following this logic, currency price fluctuations are changes in supply and demand in the entire market. Here we must know the key factors of supply and demand, supply and demand change in real time, and transactions continue to occur.
Trading is buying and selling, and it is only during the trading process that you can achieve low buying and high selling profit or increase the profit of open positions. Even if we think that weird goods are habitable, we have been holding and not buying, but such a market is a dull market and cannot reflect the value of the transaction.
From this point of view, the effectiveness of the transaction and the frequency of the transaction determine the profitability. That is, investors must increase the above two points. And who decides the supply and demand of the entire trading market? Is the main market and small and medium-sized retail investors. To be precise, the market's main force determines the basic trend of the market, and small and medium-sized retail investors make profits or losses in the main trading behavior.
The bull market must rise in price, and before the rise, it must be in shock or bottom. And the judgment at this time is that supply and demand are depleted, and demand is growing and dominating the market. Simply put, it is impossible for the position holder to sell the goods, and the main market cannot receive the goods, but the position holders are beginning to use the funds to enter the market. The supply-demand relationship at this time is obviously that supply is less than demand.
In a large market with a small supply, if there are many retail transactions, it is difficult for the market to give quick feedback. Because the main force is the basis for determining price fluctuations, when the main market force begins to dominate the market, the market will begin to enter the cycle of rapid exchange and change of supply and demand. That is, it is beginning to enter a crazy increase, and most of the properties of retail investors will be affected by the market and chase the rise.
At this time, the supply and demand are probably balanced. For the organization, all shipments must be staged, that is, in every rise, it is the best time to ship, but because of the increase in demand, supply and demand are basically still Balance, and the demand will be greater. When there is a second or third increase in demand, this time is often in the price, has undergone several ups and downs test, the price line is in line with a relatively high-quality rising channel.
Supply and demand have begun to change, and all positions can only be counted as earnings after the transaction is completed. What traders should pay attention to is the efficiency of transactions. Therefore, the main market shipment is the reason for the change in supply and demand.
In the context of strong demand, because of the continuous delivery of the main force. The volume of transactions in the market has skyrocketed, and most traders will consider it to be a second outbreak, but in fact it may be a process in which supply gradually exceeds demand.
When the supply is completely greater than the demand, the main market does not think that the current price has a value that can be bought again. The price stops, most investors continue to ship, the price no longer rises, the ascending channel ends, and enters an oscillating stage. When the market is seriously dull, the main force will ship again and sell short to increase liquidity, and the bear market opens. The next cycle begins.
This is the most basic supply and demand relationship when a bull market is formed. In this supply and demand relationship, the main investment method is to absorb goods at the beginning of the cycle and ship at the beginning of the bull market. All actions determine the changes in the market. If after a round of sharp increases, the market has not entered a bear market, and the demand in the market has not decreased because of price stagnation, which will trigger the second round of spring.
In summary, the increase in demand is the basis for the formation of a bull market, and the change in supply determines the starting point of the bull market cycle.
The next round of bull market
Right now, the halving of Bitcoin is coming, and everyone in the industry is looking forward to the bull market, but at present, the blockchain industry has exposed more obvious problems. It contains:
1. Capital accumulation in the industry, as market conditions change, capital liquidity weakens, and the market shows signs of bluntness.
2. The development pace of public chain technology is slow, and there is a big market hole between the underlying technology and the application of the scene. So far there are very few blockchain products available.
3. Various public chains and entrepreneurial teams have tried too much in financial business, and there is no core business based on blockchain technology.
4. Exchanges, stablecoins, lending, mining, and other markets have become the Red Sea, with fierce competition and isolation from external investors and users.
These problems are the background of the next round of the bull market. After solving these problems, the industrial structure of the blockchain can be initially formed. Only the horn of the bull market can be heard loudly. If not, based on the current background, it is quite certain that the next round of the bull market will not be like the bull market in early 2018, but will be a replica of the 2019 bull market.
The first is the benefit brought by the halving of Bitcoin. This major benefit is bound to be a good cycle opportunity for many institutional investors. Through the secondary market, you can get rich returns. However, from the perspective of Bitcoin's increase and market value in 2019, Bitcoin's bull market will be inevitable, but it is not a bull market for the cryptocurrency or even the blockchain industry.
The lack of market power in the secondary market is mainly due to the lack of continuous and effective capital entry. The transactions in the blockchain industry have become an embarrassing situation of inherent capital flow and even cut-off.
The progress of the entire industry is indeed very long. People in the industry who have a clear understanding of the status quo, are closely watching external policies and the attitudes of other regional markets to Bitcoin and cryptocurrencies, because This may be an opportunity to help the industry grow again quickly.
thanks for this great article