Market Review 2024: Amidst the downturn and optimism, embarking on the path to the 'Competitive Coin Season'

Author: Delphi Digital

Compiled by Felix, PANews

In 2024, cryptocurrencies are at a crossroads: Bitcoin's strong rise contrasts sharply with the overall market weakness, and it is not until the regulatory changes at the end of the year that the prospects become bright.

The crypto narrative is undergoing a reboot, and 2025 will mark a fresh start. This article aims to briefly review this year's market conditions.

Many people in the cryptocurrency community believe that with the launch of spot ETF products, the cryptocurrency market will rebound to a new all-time high. However, the reality is not exactly as expected, at least not by many people.

In the first quarter of this year, with the launch of ETFs, Bitcoin rose by more than 50%, reaching over 73,000 US dollars. Billions of dollars flowed in directly, and the market is no longer worried about institutional demand. For about 7 months, Bitcoin mainly fluctuated between 60,000 and 70,000 US dollars.

Unfortunately, except for a few outstanding tokens, most tokens are struggling. The initial 'failure' (or lack of liquidity) of spot ETH since its launch in mid-2024 has exacerbated these difficulties. Much of the 2024 story is about low market sentiment and infighting.

However, after the presidential election in November, the cryptocurrency industry finally saw the light. The changes in market sentiment and risk appetite in the past few weeks have also reflected this.

The cyclical strategy is getting on track.

At the end of 2022, Delphi Digital outlined the reasons for the bear market bottom and expressed belief in the upcoming bull market cycle 15 months ago. In last year's report, it predicted that Bitcoin would break new highs in the fourth quarter of 2024.

On the macro side, reality has always met expectations. So far, the halving of Bitcoin has not been the main catalyst for the cryptocurrency market cycle, but the liquidity cycle.

At the end of last year, Delphi Digital listed one of the favorable conditions for Bitcoin to perform well in the first quarter, which is the surge in global liquidity. It also warned that there is a higher risk of market pullback from the end of the first quarter to the beginning of the second quarter in 2024. The reason is the signs of weakening liquidity momentum.

So far this year, Bitcoin has risen by over 130%, and this has been achieved without much support from the Federal Reserve. In fact, over the past 9-10 months, Federal Reserve liquidity has been steadily decreasing.

Optimistic sentiment returns

2024 is a strange year for the cryptocurrency market. On one hand, most mainstream currencies have returned to historic highs, while the broader altcoin market has also seen a revival.

But the crypto community (e.g. Twitter) has been mostly at odds this year. The low sentiment in 2024 contrasts sharply with the positive price trend.

The first reason for the negative market sentiment is the dominant position of Bitcoin. Bitcoin has surged 130% since the beginning of the year, reaching a three-year high in dominance.

The second factor is diversification: some token prices rise, some token prices rise slightly, but most token prices fall or move sideways.

Many people have come to believe that the classic 'Road to the Season of Shanzhai' has not materialized.

Imbalance of supply and demand

As mentioned in many reports over the past year, the cryptocurrency market is facing a huge supply and demand imbalance. In short, the demand for cryptocurrencies has not kept pace with the overall supply of cryptocurrencies. The reasons are as follows.

Too many tokens

The aggregator has launched more than 10,000 tokens, compared to only about 1,500 in 2017, a tenfold increase.

Applications like pump.fun make token creation simple: since January 2024, over 4 million tokens have been issued, with over 50 million tokens entering Solana's Raydium.

Memecoin Extension

The year 2024 gave birth to the Major-Memecoin leverage investment portfolio.

Will these market dynamics remain unchanged, and will memecoin dominate for a year? Or will the crypto market return to fundamentals?

The reality is even more complicated, influenced by speculative enthusiasm and constantly changing market trends.

Solana accelerates development

In the previous cycle, SOL rose from $1 to $260 within a year. Despite being in its early stages, the ecosystem has attracted teams such as Jito, Drift, and Helium. All of these teams will become integral parts of the network.

Solana skyrocketed too high in the end. With the FTX crash, bear market, and doubts about on-chain stability, SOL plummeted by 96%.

On Christmas 2022, Bonk airdropped 50% of the supply to the Solana community. The trading price of SOL was 11 US dollars, and the outlook was not very optimistic. A few days later, SOL fell to a low point of 8 US dollars, ending a brutal year.

Solana will rise from the ashes in 2023. The core team, with a focus on serving loyal users through Drift Protocol, Jito, and Tensor Foundation, is steadily innovating to drive recovery.

As we enter 2025, there are still some issues that exist:

Has the upward trend of SOL ended?

Will memecoin disappear?

Can Base capture market share?

Will Ethereum fight back?

Although these concerns are valid, they miss the point. Solana's performance in 2025 will be based on two core beliefs:

Solana's data shows that SOL/ETH is being repriced. Lower-level activity shows strong fundamentals, suggesting greater upside compared to ETH.

Leadership and Culture: Solana's relentless innovation and thriving ecosystem give it a unique advantage in the cryptocurrency field

2024 can be seen as a turning point for the industry, but no one knows exactly how 2025 will develop.

(The above content is excerpted and reproduced with authorization from PANews, the original link )

Disclaimer: The article only represents the author's personal views and opinions, not the views and positions of Block. All content and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and trades, and the author and Block will not be held responsible for any direct or indirect losses incurred by investors in their transactions.

The 2024 Annual Review of the Currency Market: Walking the Path to the 'Competitive Coin Season' in the Downturn and Optimism