This year is a crazy year for the currency circle. BTC successfully broke through the 40,000 mark. Various currencies are constantly creating new highs. In just a few months, Bitcoin has gone from more than US$10,000 to US$40,000. What created this crazy bull market? I believe everyone knows that it has a lot to do with the global epidemic this year. Safe-haven products such as Bitcoin and gold are advancing all the way. The continuous decline of the US dollar index has created a step-by-step rise in Bitcoin and gold.
Affected by recent policies introduced by the United States, everyone in the currency circle has become particularly concerned about U.S. political news. From the time when Biden succeeded in his campaign, he was destined to go into a major bull market this year. The economic stimulus policies that will be launched after Biden takes office, as well as the increase in taxation of entrepreneurs, will undoubtedly make more entrepreneurs choose to flee and make the U.S. index fall further. So let more people have confidence in this bull market. There are already many people in the market optimistic that Bitcoin will reach $100,000 by the end of 2021. Since Bitcoin broke through US$20,000, it has been constantly creating new highs. The time between each new high and the previous high has not exceeded a week, and this time it has been 10 days since the last new high, and it seems that it has begun to be different.
Successive U.S. presidents will bring the U.S. dollar index down before they come to power, and they will bring a short-term rebound in the U.S. index after coming to power. U.S. bond yields have also been rising recently. This is good news for the U.S. Index. The U.S. government’s economic stimulus policy will undoubtedly push the U.S. index higher in the short term, leading to the continued dollar. Inflation, the U.S. Index has struggled to reach new lows in the past six months. And this is not very good news for Bitcoin. I think this is also the main reason why Bitcoin's recent rise has begun to slowly decline. What is more obvious is the gold market, which fell by more than 100 dollars in just one week, and Bitcoin, which is also a safe-haven asset, also ushered in a considerable drop compared to gold.
In the most classic stages of the bull market, the mainstream ran away, and then began a flurry of demons. Finally, many unknown currencies began to reach new highs without brains. Now this stage has a high probability of reaching the last step. The stagflation of Bitcoin and the continuous skyrocketing of other currencies are also in line with the status quo at this stage. The rise in U.S. debt has brought a rebound in the U.S. dollar index, and the possibility of Bitcoin continuing to new highs is constantly decreasing. Of course, there is no signal of peaking from the short-term K-line formation. At least for now, it seems that the disk has not released a lot of money to bring this wave of bull market to an end. We respect the trend of the disk, but we need to be more cautious in every subsequent step, at least before the red upward trend line below breaks. It is better to do more.