By CCN.com: On Thursday, Michael Arrington, the founder of TechCrunch and Arrington XRP Capital, has said that he has never been more bullish on crypto.
I’ve never been more bullish about crypto than I am right now.
— Michael Arrington (@arrington) March 28, 2019
The statement of Arrington comes after major investment firms in the crypto market in the likes of Pantera Capital and Arrington XRP Capital secured rounds exceeding $100 million to invest in emerging companies in the crypto industry.
Why Bullish on Crypto When Bitcoin Price is Stagnant?
Despite the strong performance of alternative cryptocurrencies, the bitcoin price has been unable to break out of the $4,000 region since December, briefly reaching $4,200 in some markets.
Bitcoin price in the same tight range in the past 3 months (Source: coinmarketcap.com)
The extended period of stability demonstrated by bitcoin has worried technical analysts throughout March, considering that the bitcoin price experienced a 50 percent plunge in price in November 2018 when it showed minimal price movement for a span of about 3 months.
“Once price breaks $4,200 it could move fast. Matter of watching levels, just like 3700 yesterday. The key for the short-term prosperity of the crypto market is for BTC to break out of major resistance levels with strength,” economist Alex Krüger said in February.
However, bitcoin has struggled to test any key resistance levels above the $4,000 level.
While the analysis of technical indicators of bitcoin and the short-term projection of the dominant cryptocurrency vary, activities and developments in the crypto industry have shown that the interest in the asset class still remains relatively high following a 15-month bear market.
Perhaps most importantly, in recent months, the crypto industry has seen major startups and leading companies mature amidst one of the worst corrections in the history of the cryptocurrency market.
While developer activity has noticeably declined due to an overall drop in the inflow of capital into the cryptocurrency industry from retail investors, quality projects and companies have continued to demonstrate signs of growth and expansion.
Developer activity and capital in the market may have dropped but they have been allocated to projects and companies that build, execute, and grow, which ultimately may benefit the cryptocurrency industry in the long run.
Valuation of the crypto market is still down by 82% since its all-time high (Source: coinmarketcap.com)
The valuation of the crypto market has dropped by nearly 82 percent from $813 billion since January and it has provided investors with viable opportunities to enter the market with reasonable valuations of projects.
Investors, especially retail investors that were affected by the market crash in January 2018, could take a long period of time to recover. But, investors who felt they have missed out the last bull market may feel compelled to enter while the valuation of the cryptocurrency market is at its lowest point in recent years.
In many areas including valuation, developer activity, activity, growth, and adoption, the crypto market has shown significant potential in a dark period wherein startups are struggling to obtain new capital to survive, which can be considered as a positive indicator of long-term growth.
Fundamentals are Important Too
On Wednesday, Nicolas Cary, the co-founder of Blockchain, the most widely utilized cryptocurrency wallet in the global market, said that the number of transactions on the Bitcoin blockchain achieved a 12-month high.
Yesterday, the #bitcoin blockchain had the highest number of confirmed transactions of the past 12 months. Do you think the #cryptowinter is thawing? https://t.co/WR7IDhzC5p
— Nicolas Cary (@niccary) March 28, 2019
The hashrate of the Bitcoin network has also increased steadily in the past 12 months despite the abrupt dip in hashrate in late 2018 as a result of the Bitcoin Cash and Bitcoin SV hash power war.
The prices of cryptocurrencies do not accurately depict the level of development and activity that is seen in the crypto market and for that reason, industry executives have expressed confidence in that the market has established its bottom and could be on its way up.