It is very difficult to judge what causes the price of an asset to run. Often, it is the overall market sentiment that moves things. As traders know, "the trend is your friend". A large portion of assets will move together within a particular market.
For example, when equities are on a bull run, most stocks see gains. There will be a few laggards for whatever reason and those are often ones to watch out for.
The same holds true in cryptocurrency. As Bitcoin started to take off, slowly, over the ensuing year, other tokens started to follow.
That said, the market is its own entity. It moves how it wants, when it wants. Thus, trying to apply "rules" to what is happening is impossible.
Over the years, we saw a number of pumps in the crypto world. With many tokens having extremely small market caps, this is easy to do. It is something we see occur with frequency in the penny stock world.
Basically a couple of money players come in and "play with the tape". This leads them to moving the price up by causing a momentum play. In the end, the price crash when the manipulators exit the pump, taking their money with them.
Traders do not care about pumps. In fact, they love them. These people look for momentum and depend upon it for massive gains. To them, the asset is really of little importance.
Investors are a different breed. They are thinking longer term and do care about where their money is going. This means they look for certain signs that align with what their research reveals.
Which brings us to Hive. For the past year I maintained that token price is secondary. It truly is a lousy barometer as to the value of what is taking place. The development is the most important thing since that is where the user base will come from.
In looking at the chart, we can see something that is very telling.
Using the 90 day chart from Coingecko, we see this move:
This is one of the most boring 4x runs anyone will ever see. Nothing here is real exciting to the trader. Instead, we see a chart that screams "slow and steady".
It is something, however, that is vital to investors. People want to see something that is growing. For those who understand what is taking place on Hive, development is growing at an accelerating pace. This will eventually be reflected in the token price.
HIVE legged higher while also spending time consolidating. This is a wonderful way for an asset to behave. Each pullback resulted in a "higher-low" meaning it was still higher than where it started the previous burst.
We have a case where we are seeing healthy moves in the market regarding HIVE. This should bode well in the future.
To contrast, let us step further back and look at the 1 year chart.
Notice the difference from the last time. Look at the move in early May. The price of Hive went straight up. Unfortunately, when the market pumps, it often dumps. That is exactly what happened.
While applying "fundamentals" to markets is always tough since they basically do what they want, here we could make the case that this pump is inspired, at least in part, by the development that is taking place on Hive.
Ultimately, any blockchain is going to have to depend upon what is taking place on it for its long-term success. While everyone loves the publicity and marketing game, in the end, chains with little taking place will end up having little value.
If we want an example of this, look at EOS. This was a chain that started with great fanfare yet since it went live, it has seen difficulty. As we found out, there is dispute between the direction of Block.One as compared to the developers on the chain.
The question of what is taking place on there is a valid one? In fact, this applies to all blockchains. People tend to look at price without really inquiring what is really going on there. After all, the market values it greatly so it must be worthy. This is a grave mistake because markets often misprice things.
Hive is in a totally different situation. It does not take a lot of effort to uncover the development that is taking place on here. We are rapidly moving to another level as more options are developed for users. The existing applications are providing upgrades offering new features while new projects pop up on a weekly basis.
All of this is leading to the idea that Hive could really be a success based upon its development. That is what is going to lead it high over the long-term. There is no hype surrounding HIVE and this is a good thing. It allows for those building to focus upon what they need to. All the rest is really noise anyway.
Is the overall market trend helping the price of HIVE? Most likely. If the market drops, we can expect a pullback in HIVE also.
However, what is shaping up is a point whereby the market participants start to realize what is taking place. As the token legs higher, it provides confidence to outside investors. Bigger market caps offer that confidence as long as there is something to substantiate it.
Hive is working on the substantiation each day. We see more being developed which also will inspire that trust from the investment community. This is a slow process, requiring a lot of grinding away. There are no shortcuts. Confidence is something that has to be earned.
So while we are not there yet, the progress over the first year is remarkably. As it will, the token price was all over the place but the progress of the ecosystem was steady. We are now seeing that reflected in the chart.
As long as we see the development continue, we will, over the long-term, see this play out in the market price. There are going to be ebbs and flows but the overall trend will be up.
This is what development based pumps look like.
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