Han Feng, author of “Blockchain Wealth of Nations”: The crypto market will trend towards a “little bear” trend
Bitcoin has retreated again after rising for three consecutive days. Comparative terminal data shows that since hitting a low of less than $34,500 a week ago, Bitcoin has risen by more than 20%. This may be due to a sharp drop in local people's trust in fiat currency due to the Russian-Ukrainian war, and they are turning to crypto to seek safe haven.
With the Federal Reserve's interest rate hikes, inflation, COVID-19, and geopolitical changes, the crypto market is facing more and more uncertainties, and ordinary investors are concerned about whether the market will go bullish or bear next.
Han Feng, author of “Blockchain Wealth of Nations”, believes thatMarket forces alone can no longer push Bitcoin into a “big bull market”。
Comparative terminal data shows that the crypto market first reached the $2 trillion mark in August 2021, then soared to a record high in November, with a market capitalization of $3 trillion. At press time, the total cryptocurrency market value was about $1.9 trillion.
Han Feng said in a comparative review: “The crypto market is much larger than before, and the plate is so big that it can be pushed up without making small noise in the market.”
At the same time, governments are increasingly regulating Bitcoin, and the high volatility of the crypto market has always been a “nail in the eye” of regulators. Bitcoin has grown to the point where the government feels that its financial system is under threat, such as the withdrawal of all crypto mining from China.
After bottoming out three times, the “Little Bear” trend is still likely to rebound by 60,000 US dollars
Bitcoin reached a record high of around $69,000 in November last year. Compared with the low of around $3,000 in 2018, it has risen more than 20 times, but compared to the big bull market that rose 100 times in 2013 and 2017, this increase is dwarfed. Han Feng believes that last year's bull market did not “soar to the sky.”
“When Bitcoin reached 69,000, I didn't have that crazy feeling. At the time, I felt that the bull market was far from here. Due to various factors, it wasn't completely released, just like the volcano was stuffy when it was time to erupt, but the energy was still there. “You don't know when it will break out,” he said. “This is both a bad thing and a good thing. The bad thing is that it hasn't become a real big bull market, it hasn't reached the highest point possible, and the good thing is that it hasn't used up all of the opportunities that lie ahead like before.”
Another thing worth paying attention to is the bottom feature. Han Feng analyzed, “The characteristics of the previous bear market bottom were so obvious. It was lower time by time, almost by a thousand miles. However, the recent pullback has repeatedly bottomed out three times, namely at $29,000 and $30,000 last year, and bottomed out another $33,000 a few days ago. Almost every bottom is a little higher than the previous one”.
“The general characteristic is that, despite so much suppression, its bottom gradually rises. So I don't think this year is like in the past. It has entered a bear market with a sharp drop, and its bull market energy has not completely been lost.My overall judgment is that Little Bear and Maverick are bouncing back and forth. A rebound to 60,000 is also possible, and a further decline of more than 30,000 will bottom out”。
Bitcoin is a safe-haven asset like gold
Since the Federal Reserve turned hawkish in November 2021 and suggested multiple rate hikes in 2022, some traditional market observers have predicted that currencies in emerging market economies (such as developing countries such as India and Mexico) may depreciate, which may boost demand for Bitcoin in these markets. Interest rate hikes triggered a sharp reversal in capital inflows, leading to a decline in exchange rates. Even a slight depreciation of the currency could trigger panic purchases of gold and bitcoin, as evidenced by the recent rebound in crypto and gold caused by the Russian-Ukrainian conflict.
Statistics from crypto data provider Kaiko show that since Russia invaded Ukraine, the volume of transactions on centralized Bitcoin exchanges in rubles and hryvnia has soared to the highest level in months.
Han Feng also believes that the occurrence of black swan events such as wars is beneficial to the adoption of Bitcoin.
He said, “As soon as society panics in the financial system, gold rises, and as soon as there is a war, gold also rises. Why? Gold is not controlled by any government; it is market-formed. It is a private wealth consensus.Bitcoin and gold are the same on this point; they are essentially consensus. In other words, no government believes it; in the end, they will have to switch to gold and Bitcoin.”
Many industry insiders are cautious about Bitcoin's short- and medium-term trends. Galaxy Digital CEO Mike Novogratz believes that Bitcoin will bottom out at $33,000, but in the foreseeable future, it may trade between $30,000 and $50,000.
Han Feng also cautioned that the current consolidation of fluctuations is likely to remain deadlocked for a long time.
The future market of Ethereum can be expected
Ethereum is the second-most popular cryptocurrency with a current market capitalization of around $338.4 billion. More than just a digital asset, it has become a market cornerstone for financial services, games, and apps. With the advent of applications such as DeFi, NFTs, and GameFi, Ethereum is also attracting the interest of traditional corporate and institutional investors.
Han Feng is optimistic about the future direction of Ethereum. He said, “There are too many applications on Ethereum, DEFI, GAMEFI, metaverse, and real users. This is fundamentally different from 2018. The industry will develop more and more healthily. Overall, I don't think there is any need to lose confidence.”
Ethereum's price soared to a record high of $4,859.50 in November, trading at $2,731 at press time, and is still down 44% from its all-time high, according to data from the comparison terminal.
Author: Mary Liu
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