Is The Bull Season In The Cryptocurrency Sector Over? Here are All Scenarios and Expert Reviews!
🚨What do the recent events in the cryptocurrency industry point to?
The volatility of the cryptocurrency industry has reached alarming levels, especially in the last 48 hours. The rapid movement of the industry may have scared investors who are new to this ecosystem. Well, after all the negative news that has been served recently, can it really be said that the bull season is over?
🚨Elon Musk and the Beginning Point of Manipulation
Behind the Scenes of Tesla's Bitcoin Announcement
Is the Bull Done?
Is The Fourth Hit To Cryptocurrency Sector Today?
How Did the Bull Season Begin?
In fact, the whole process should be examined in order to understand this course more clearly. It is known that the prices of BTC, which decreased to $ 3,700 and ETH, which decreased to $ 80 when March 2020, caused many investors to think that the “cryptocurrency ecosystem” is coming to an end. Cryptocurrencies, which have been on the rise since then, are now on the radar of institutional investors and even the world's largest banks.
With the coronavirus pandemic, the mainstream acceptance, which would normally take place much longer later, now officially appears to be or is about to happen. The biggest step in mainstream acceptance was PayPal 's cryptocurrency adoption, as many investors will remember . The ability of millions of users to buy and sell cryptocurrencies directly via PayPal started the bull season.
🚨Block Reward Halving Effect for Bitcoin
Of course, the effect of Bitcoin's block reward halving, which also affected in 2012 and 2016, reached much higher levels with PayPal. When looking at Bitcoin's movement in previous block reward halving, it is seen that there is actually a serious rise after each halving.
The fact that the amount of BTC obtained from each block is reduced by half, as the demand for BTC also increases, it positively affects the price. The halving that took place in 2012 and showed its effect at the beginning of 2014, then took place in 2016 and showed its effect in 2017. This year, the halving in 2020 started the rally in 2021 as expected.
BTC, which did not reach this much mainstream acceptance in previous rallies, this time moved very differently than a normal bull and bear cycle. BTC, which experienced a 30% or more decline in the rise to $ 20,000 in 2017, has gained confidence since the beginning of 2021.
Increasing Institutional Investors and Manipulation
Of course, MicroStrategy's Bitcoin purchase was also effective in not experiencing such a decline. A company listed on US stock exchanges took Bitcoin as a reserve asset. Reaching the individual investor with PayPal and the institutional investor with the current initiated by MicroStrategy, Bitcoin reached $ 20,000 before the end of the year and broke a record.
But that's where things get mixed up, and institutional investor involvement actually increases the danger for individual investors. The cryptocurrency sector, which was attracted by the giants of the USA and the "Wolves of Wall Street", had already begun to change. The FED's printing of trillions of dollars and central banks following it have made Bitcoin and gold incredibly valuable. BTC, seen as digital gold, has indeed proven its worth with the coronavirus epidemic.
🚨Institutional investors, on the other hand, began to look for ways to earn more money from this sector as well as protect their reserves. The fact that there will not always be a rise in any sector has been forgotten due to the ongoing ups and downs for a while, and many investors have opened more than they can afford. The fact that this is a very important detail can be understood from the link between the funding rate and the price movement.
The chart below shows the funding rate reached for each day from November 11, 2020 until this date. The funding rate can be expressed as the premium paid to each other by investors trading in leveraged trading markets. If there are many long positions that are focused on the rise on that day, those who open long positions pay a funding fee to those who open short positions.
It can be seen that there is a sharp decline after every moment the funding rates inflate. In the graphic below, when we look at the moments that coincided with February 20, 2021 and the funding rates broke a record, it can be seen that there was a very sharp decline in the continuation.
Looking at the price action of BTC after the funding rate swelled on February 20, it is seen that there was a sharp decline from $ 57,000 to $ 44,000. This is commonly known as the act of curbing the rise in the market and actually clearing leveraged transactions. Again, looking at the same graphs, it can be seen that there has been a sharp decline from $ 62,000 to $ 50,000 since March 16, when funding rates swelled.
🚨Elon Musk and the Beginning Point of Manipulation
However, the fact that the cryptocurrency industry has become a market of more than $ 2 trillion has made it far beyond these manipulative movements that have been done before. The CEOs of companies that now manage trillions of dollars, such as Elon Musk, Twitter CEO Jack Dorsey, and even BlackRock, have also actively participated in the industry and made their place clear.
After that, a great war of manipulation started. The biggest proof of this is that Elon Musk constantly brings up a cryptocurrency produced purely for joke and supports it until it becomes the 4th largest crypto currency. In addition, the allegation that the US financial regulator initiated an investigation into Elon Musk's DOGE tweets also clearly reveals what is going on.
🚨Behind the Scenes of Tesla's Bitcoin Announcement
Elon Musk, who was initially declared a "hero" by making Bitcoin return from $ 38,000 and announcing Tesla's purchase of Bitcoin, was declared a traitor on May 13. The point that investors missed here was that Elon Musk was interested in the "emotional" side of the industry from the very beginning. Elon Musk, who can create a drop of up to $ 366 billion with a single tweet in the cryptocurrency market that has not yet been fully regulated, has the power to make money in this market without notice. Individual investors, on the other hand, are in the part of people who are victims of names like Musk and lose money.
The fact that Elon Musk shared positive news when Bitcoin was falling, but after emphasizing that Bitcoin was energy efficient 2 weeks ago, he stated that they will not accept BTC today because it is not clean energy, it seems inexplicable otherwise. However, it is also claimed that Musk did this within the scope of ESG sustainability rules. Larry Cermak stated that Musk may have halted Bitcoin payments, especially because he had to adapt to Tesla's model known as environmental, social and corporate governance. Of course, this is quite a possible claim for the publicly listed Tesla.
Of course, before Tesla's announcement, Vitalik Buterin sold billions of dollars worth of SHIB, DOGELON and many similar cryptocurrencies sent to his own address, also influenced the industry. Buterin's reason for doing this was to intimidate crypto money projects that use them in their advertisements by portraying himself as "the weak point of the project is only Buterin". The overlap of events increased its effects.
🚨Is the Bull Done?
So, is this decline coming with the news of Elon Musk and Vitalik Buterin as frightening as it seems and can end the bull season? In fact, although the influx of institutional investors to the sector has increased recently, when the volume in the spot market is examined, it is seen that the sovereignty is still unconditionally in the individual investor. The fact that cryptocurrencies such as DOGE, SHIB, AKITA suddenly reach billions of dollars in volume is the proof of this.
In addition to this information, when looking at the stock market data at the time when the news of Elon Musk and Vitalik Buterin came to the fore, it is seen that someone bought almost all BTCs sold one by one. Looking at the data transferred by Byzantine General, it is seen that only today, 10,000 BTC has been released from the Coinbase exchange. It has been seen that the heavy BTCs from Coinbase have always been the purchase of institutional investors. In other words, the spread FUD (fear, uncertainty and doubt) for the time being is actually "bought" by institutional and individual investors.
The news that is served today, emphasizing that Binance is under investigation in the US, fully fits the definition of FUD. Although the Binance CEO emphasized that this was not an investigation into the stock market and only an informational relationship, BTC had dropped below $ 48,000 again.
Bitcoin's only 9% decline in the last 24 hours despite three consecutive bad news shows that the 30% declines seen in the 2017 rally are still far below. The reason for this can be expressed as that the sector has now reached many different people and is accepted as mainstream. Famous crypto money analyst Alex Krüger stated that the industry will no longer experience a bear season as before, but it will see small declines like this.
🚨Is The Fourth Hit To Cryptocurrency Sector Today?
Of course, in order to experience such declines, fearful news will be served from time to time. Popular analyst Cobain emphasized that this is actually a classic bear market cycle and that step 4 would be the news of a stock market hacking. For now, every negative news Cobain has mentioned is progressing exactly as stated. An important data release will be made on Coinbase, the largest cryptocurrency exchange in the USA, today in the afternoon. Even if the stock market is not hacked, the first quarter data of an exchange listed in the US is below expected, which could hit the industry fourth.
Josh Rager also stated that he has no doubt that if Coinbase's earnings turn out to be worse than expected, it could fall again.
For now, it seems that the mainstream media has used almost all their bullets and BTC is still resisting. While this does not mean that there will be no sharp decline and the decline will not continue, the majority of experts think the bull is not over yet.
The Pi Indicator, which marks the end of the bull season in 2013 and 2017, on the other hand, signaled a peak on April 13, when the price of Bitcoin rose above $ 60,000. Although sharp declines were seen in previous rallies after this signal, the mainstream acceptance this time may prevent the situation from being similar. However, other on-chain indicators that are important for the BTC price point out that the bull is still far from over.