During the previous period of the sharp rise of Bitcoin, many strange phenomena appeared in the encrypted digital currency trading market: first, the phenomenon of false transactions in some encrypted digital currency transactions increased sharply, attracting unknowing new investors to enter the market; second, some trading platforms were down. , Abnormal trading events such as flashbacks, freezes, and undisplayed positions frequently occur, affecting users' normal trading operations such as placing orders, canceling orders, and closing positions. Once they encounter a significant change in the price of Bitcoin, many investors have no choice but to accept the high Leveraged investment has a bitter fruit.
Since January this year, the market has been hyping more and more institutional investors entering the market to increase their holdings of Bitcoin. As everyone knows, after the price of Bitcoin soared by more than US$35,000, many Wall Street investment institutions bought a large number of short positions with execution prices above US$40,000 in the Bitcoin futures market or derivatives. This may be the real driving force behind Bitcoin's sharp fall this week.
The rise and fall of Bitcoin prices are largely affected by changes in investor sentiment and changes in risk appetite. Moreover, investors' risk appetite and sentiment toward Bitcoin can easily jump from one extreme to another. For example, when Bitcoin continued to fall to a low of $3,000 before, many investors believed that Bitcoin was “worthless” under the circumstances of regulatory pressure and lack of application scenarios, and they did not want to buy on dips at all; The coin soared above 42,000 US dollars per coin, and these investors firmly believed that bitcoin had the value of replacing gold, and turned to high prices to catch up. Zhao Cheng believes that this switch of mentality among investors makes Bitcoin an extremely easy asset to be manipulated.
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