“Crypto Spring” May Be Back, but Investors Should Remain Cautious

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Is crypto spring finally here? Renowned venture capitalist and angel investor, Fred Wilson, believes it just may be, as he mentioned in a blog post, May 15, 2019. His fund, Union Square Ventures (USV), is one of the most significant private investment funds in the space and has funded the likes of Blockstack, Coinbase, Polychain Capital, and Numerai.

Upswing of Positivity

The market is looking as bullish as it was in early 2017, filled with positivity and market confidence. Putting fundamentals and technicals aside, the sentiment stands at a yearly high, and people have begun calling the “bottom.”

In a blog post, Fred Wilson spoke of the increase in market volume and market breadth from the 2017 bull run. The most significant difference he points out is the visible development in the technology, project awareness, and fundamentals.

One thing that has shocked many people in the last year is the lack of market upswing in the face of rapidly developing fundamentals. In equity markets, once fundamentals and product development picks up the way it did in the second half of 2018, assets begin to bounce off the positivity and shoot upwards.

Crypto markets, unfortunately, had to undergo the bearish market cycle despite the growing fundamentals. After such an exuberant run up to $19,750, it was long due to a winter of red candles for markets to regain liquidity.

With Chinese investors supposedly flooding the market to escape capital restrictions and retailers adopting a system that allows users to pay in crypto, the fundamentals are as bright as ever, and price action is now joining it on the upside.

Getting Caught Up With Price

Retail investors in the market often get too pent up on price and ground level sentiment. It’s much more important to understand the historical stance of those who control a majority of market liquidity.

In 2015, 2016, and early 2017, many price dumps arrived that are suspected of having been orchestrated by crypto whales, or entities holding massive amounts of crypto. The point of these dumps is to scare certain people out of the market, and it worked, especially in the beginning after Bitcoin had just bottomed and people were worried over further downside.

The critical insight from this development is if anyone is going to join such a volatile market, they need to learn how to adequately control their emotions and rationalize the long term viewpoint to themselves.

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