Market Indicators Back to the Major Turning Points in the Last Cycle: Is the Next Bull Market Coming?
After going through the seemingly peaceful July, the crypto market seems to have absorbed the panic emotions, as Ethereum, Bitcoin, and altcoins start to rebound. Despite that, investors in crypto communities stayed particularly quiet possibly due to the series of crypto failures, which have made them more prudent. As we turn to the capital market, incomplete statistics show that 44 fundraising activities took place in the blockchain space last week.
In particular, 13 fundraising campaigns, the biggest of which raised $150 million, occurred in the category of infrastructure and tools, making it the most popular destination of blockchain investment. NFTs and the metaverse, the second hottest segment, witnessed 11 fundraising deals, and the biggest deal is worth $11 million.
Roughly speaking, such actions released two signals:
- Confident in the future of cryptocurrency, the capital market has chosen to invest in cryptos despite the global liquidity crunch. Meanwhile, institutional investors believe that the crypto market will need more infrastructures as the market remains in its infancy;
- The big investors have been prudent when it comes to NFTs and the metaverse. That said, the fact that the category stayed in the center of attention suggests that it could start the next market cycle.
Last week, the Fed announced another big rate hike (the fourth time this year), raising the federal funds rate by 75 basis points (bps), to a range of 2.25% to 2.5%. Facing a global liquidity crunch, the crypto market is unlikely to become bullish on its own.
However, for the crypto market, this is a hazard and also an opportunity. After a series of deleveraging events, most of the non-performing crypto assets have been exposed, which drove away the hot money. Subsequently, more institutional investors will reenter cryptocurrency and wait for the moment. During this cycle, the market will become bigger and more regulated.
Looking at the relevant figures, we can tell that the number of active BTC addresses has not changed much compared to the figure recorded during the last bull market, and only some of the peak figures have fallen. The number of active ETH addresses, on the other hand, has soared as the market rebounds recently. It should be noted that addresses with ETH deposits stayed highly active on exchanges last week, hitting a new record this year, but the figure then plummeted.
Let’s then check out the capital netflow of Bitcoin and Ethereum, both of which stayed stable throughout last week.
Finally, let’s hear what the Rainbow Price Charts say about the present market conditions. As the figures below indicate, Bitcoin is now “basically a fire sale”, while Ethereum has moved from “a fire sale” to “undervalued”. The trends of the two resemble the trends recorded in March 2020, which marks the beginning of the previous bull cycle.
As the private economy expanded, the 80–20 rule changed, and now 10% of the population owns 90% of the wealth in the world. Meanwhile, a growing number of people are trapped in the cocoons created by oligarchs who control the Internet. Instead of being independent thinkers, they have become submissive. However, some individuals are awakening and influencing more people via the Internet, which means that blockchain and the crypto market will become increasingly valuable.
From a technological standpoint, the Internet represents a new height of the modern neoliberal economy, but it seems like it is controlled by only a few people. In such a world, the so-called patents are sometimes merely umbrellas that protect oligarchs.
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Disclaimer: This article offers no investment advice, and all statistics mentioned herein are for reference only. The information provided herein may not be relied upon for investment decisions, for which you will be fully liable.