Han Feng, author of "The Wealth of Nations through Blockchain": The crypto market will tend towards a "bull and bear" trend

Bitcoin fell again after three consecutive days of gains. Bitpush terminal data shows that Bitcoin has risen by more than 20% since hitting a low of less than $34,500 a week ago. This may be due to the fact that the Russian-Ukrainian war has caused the local people's trust in fiat currency to plummet, and they have turned to encryption for safe havens.

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 bearish next.

Han Feng, author of "The Wealth of Nations through Blockchain", believes that it is impossible to push Bitcoin into a "bull market" relying solely on market forces .

Data from the Bitpush terminal shows that the crypto market reached the $2 trillion mark for the first time in August 2021, and then soared to an all-time high in November with a market value of $3 trillion. As of press time, the total market value of cryptocurrencies is approximately $1.9 trillion.

Han Feng compared the situation and said: "The size of the crypto market is much larger than before. The market is so big that it cannot be pushed up by a small move."

At the same time, governments around the world are increasingly regulating Bitcoin, and the high volatility of the crypto market has always been a thorn in the side of regulators. Bitcoin has developed to the point where governments feel their financial systems are threatened, such as all crypto mining being withdrawn from China.

Three bottoming outs, "bull and bear" trends, a rebound to $60,000 is still possible

Bitcoin reached an all-time high of around $69,000 in November last year, up more than 20 times from its low of around $3,000 in 2018. However, this increase pales in comparison to the two bull markets in 2013 and 2017, which saw a 100-fold increase. Han Feng believes that last year's bull market did not "take off".

“When Bitcoin reached 69,000, I didn’t feel crazy. I felt that the bull market was still far away. Due to various factors, it was not fully released, just like a volcano that was suppressed when it should have erupted, but the energy is still there. You don’t know when it will erupt,” he said. “This is both a bad thing and a good thing. The bad thing is that it did not become a real bull market and did not reach the highest possible point. The good thing is that it did not use up all the subsequent opportunities like before.”

Another thing worth noting is the bottom characteristics. Han Feng analyzed: "The previous bear market bottom characteristics were too obvious, each time lower than the last, almost a sharp drop. But the recent retracement has repeatedly built three bottoms, namely $29,000 and $30,000 last year, and another bottom of $33,000 a few days ago. Each bottom is almost a little higher than the previous one."

"The general feature is that although it has been suppressed so much, its bottom is gradually rising. So I think that this year is not like the past, where it plunged into a bear market. Its bull market energy has not been completely lost. My overall judgment is that the small bear and the small bull will rebound back and forth. It is possible to rebound to 60,000, and if it falls again, it will bottom out at more than 30,000 . "

Bitcoin is a safe-haven asset like gold

Since the Federal Reserve took a sharp hawkish turn in November 2021 and hinted at multiple rate hikes in 2022, some traditional market observers have predicted that currencies in emerging market economies (e.g., developing countries such as India and Mexico) may depreciate, which could boost demand for Bitcoin in these markets. Rate hikes trigger a sharp reversal of capital inflows, leading to a slide in exchange rates, and even a slight currency depreciation can trigger panic buying of gold and Bitcoin, as evidenced by the recent crypto and gold rally triggered by the Russia-Ukraine conflict.

Statistics from crypto data provider Kaiko show that trading volumes on centralized Bitcoin exchanges denominated in rubles and hryvnias have surged to their highest levels in months since Russia’s invasion of Ukraine.

Han Feng also believes that the occurrence of black swan events such as war is actually conducive to the adoption of Bitcoin.

He said: "Once there is a financial system panic in society, the price of gold will rise. Gold will also rise when a war breaks out. Why? Gold is not controlled by any government. It is formed by the market. It is a consensus on wealth among the people. Bitcoin and gold are the same in this respect. They are essentially a consensus . That is to say, no government believes in it anymore, and eventually it will have to turn to gold and Bitcoin."

Many industry insiders are cautious about the short- and medium-term trend of Bitcoin. Galaxy Digital CEO Mike Novogratz believes that Bitcoin will bottom out at $33,000, but in the foreseeable future, its trading price may be between $30,000 and $50,000.

Han Feng also reminded that the current volatility and consolidation may continue for a long time.

Ethereum's future is promising

Ethereum is the second most popular cryptocurrency with a current market value of approximately $338.4 billion. It is not just a digital asset, but has become a market cornerstone for financial services, games, and applications. With the emergence of applications such as DeFi, NFT, and GameFi, Ethereum is also attracting the interest of traditional enterprises and institutional investors.

Han Feng is optimistic about the future trend of Ethereum. He said: "There are too many applications on Ethereum, including DEFI, GAMEFI, and Metaverse, and there are real users. This is fundamentally different from 2018. This industry will develop more and more healthily. In general, I don't think there is any need to lose confidence."

Data from Bitpush terminal shows that the price of Ethereum soared to an all-time high of $4,859.50 in November. As of press time, it was trading at $2,731, still down 44% from its all-time high.