Is Crypto Spring Finally Here? Renowned venture capitalist and angel investor Fred Wilson believes it could be, as he mentioned in a blog post on May 15, 2019. His fund, Union Square Ventures (USV), is one of the most significant private equity funds in the space and has funded the likes of Blockstack, Coinbase, Polychain Capital, and Numerai. The market looks as bullish as it did in early 2017, filled with positivity and market confidence. Putting aside fundamentals and technicals, sentiment has reached a yearly high, and people are starting to call a “bottom.”
Crypto Rebound? Tread Carefully
I polled well-known influencers, analysts, and traders on their likelihood that a bottom is in this bear market. Here are the results: 95% @woonomic (Adaptive Capital / On-Chain Analyst) 90% @jespow (Kraken Founder) 90% @arjunblj (Analyst) 85% @novogratz (Galaxy Digital) — Willy Woo (@woonomic) April 22, 2019 In his blog, Fred Wilson talked about the increase in market size and market breadth compared to the 2017 rally. The most significant difference he notes is the visible advancement in technology, project awareness, and fundamentals.
Spring Optimism Meets Market Caution
One thing that has shocked many people over the past year has been the lack of a market rally in the face of rapidly evolving fundamentals. In the stock markets, once fundamentals and product development pick up the pace that they did in the second half of 2018, assets begin to bounce back from the negatives and skyrocket. Unfortunately, crypto markets have had to go through a bear market cycle despite the growing fundamentals. After such a massive price rally to $19,750, it has been a long time coming for the markets to regain liquidity.
Crypto Spring or Just a Tease?
Chinese investors have allegedly flooded the market to avoid capital restrictions and retailers have adopted a system that allows users to pay in crypto, the fundamentals are as bright as ever and the price action is now joining in on the positive side. Retail investors in the market are often too constrained by price and fundamental sentiment. It is much more important to understand the historical position of those who control the majority of the liquidity in the market.
In 2015, 2016, and early 2017, there were many price dumps that are suspected of being orchestrated by crypto whales or entities that hold a huge amount of crypto. The point of these dumps is to scare certain people out of the market, and it worked, especially in the beginning when Bitcoin had just bottomed out and people were worried about a further decline. The critical understanding of this development is that if anyone is going to join such a volatile market, they must learn to adequately control their emotions and rationalize a long-term view of themselves.
