Before March 12, the price of Bitcoin was hovering around $7,000-$8,000. At that time, the market asked: "Is Bitcoin a safe-haven asset?". After yesterday's turmoil, I believe many people have given up the idea of using Bitcoin as a safe-haven asset.
At 6:00 pm on March 12, 2020, Beijing time, Bitcoin began to drop rapidly from nearly $8,000 to around $6,000, until it fell below $6,000. On the morning of the 13th, the price of Bitcoin continued to fall, and some trading platforms dropped to $4,000; at present (19:00 on March 13, 2020, Beijing time), the price of Bitcoin is fluctuating around $5,000.
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Reason and Simple Process
Regarding what happened to Bitcoin within these ten hours, TokenInsight believes that this is due to:
Bitcoin's liquidity stampede + panic psychology + liquidity channel obstruction + partial selling pressure in the spot market are jointly caused
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Liquidity Data Analysis
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Source: TokenInsight
Source: TokenInsight
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Source: TokenInsight
Source: TokenInsight
The second picture shows the data of Huobi. Similar to the data of Binance, Huobi also had a huge gap of nearly 100,000 BTC between 6:00 p.m. and 7:00 p.m. Unlike Binance, Huobi saw a rapid increase in buying orders in the subsequent period. Combined with Binance’s data, this also partly explains why buying orders continued to exceed selling orders but the price did not rise rapidly.
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Source: TokenInsight
Source: TokenInsight
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Source: TokenInsight
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Source: TokenInsight
Source: TokenInsight
Source: TokenInsight
Observing the data of Binance, Huobi, and OKEx from 19:00 to 20:00 on March 12, it can be seen that when the leading exchanges faced such an extreme market, the performance of buying and selling orders varied greatly.
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real trading volume
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Source: TokenInsight
Source: TokenInsight
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flow channel blockage
trading platform blocking
In addition to the problem of insufficient liquidity of Bitcoin in the market, the system carrying capacity of many exchanges itself has also exacerbated the problem of congestion. This is mainly reflected in two places. The first one is that the risk control capabilities of some exchange systems are insufficient, and they cannot withstand the test of extreme market conditions at all, and they directly shut down.
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Source: TokenInsight
Source: TokenInsight
block chain network
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Summarize
Summarize
This crisis is actually another baptism for the digital asset industry. Although I don’t want to admit it, the industry will experience a cold winter in the next period of time. Survival is currently a challenge to industry organizations and practitioners. Second, combined with the continuous rejection of Bitcoin ETFs, we must admit that there are still relatively serious price manipulations in the Bitcoin market, which is the core reason why Bitcoin ETFs are constantly rejected by the SEC . Third, the crisis this time is an economic crisis+financial crisis that is more serious than a simple financial crisis. What is even more frightening is that the economic crisis has just come to the fore. It is just beginning to emerge that many countries are in the early stages of the virus' impact. Fourth, the digital asset market represented by Bitcoin, like other markets around the world, is in a stage of excessive panic. In the face of major crises and panics, financial models and diversified investments are actually ineffective. It is not particularly meaningful to simply discuss whether Bitcoin is a safe-haven asset.
Seeing him/her/it build a tall building, seeing him/her/it entertain guests, seeing his/her/it building collapse. At this time, there must be countless voices in the market questioning Bitcoin, "Is the halving market a scam?" "Is Bitcoin a scam at all?" Asking everywhere whether you should buy bitcoin, the people who tout bitcoin as a way to wealth and freedom are basically the same group of people.
Markets go up and down, and market sentiment exacerbates these fluctuations. We still believe in the power of blockchain and the investment value of Bitcoin as a commodity. Finally, someone will definitely ask, is now a good time to invest in Bitcoin? When is the best time to invest in Bitcoin?
There are always risks in investment. The most important point of investment is to identify your own risk tolerance in advance. Bitcoin is a commodity. On the basis of measuring one's own risk tolerance, it is also a way of financial management to reasonably invest part of one's assets in Bitcoin.
