Crypto Market Analysis: January’s Volatile Ride Sets Stage for February Surge?

As we bid farewell to the first month of 2024, the cryptocurrency markets have proven to be nothing short of a high-speed roller coaster ride. From the exhilarating New Year rally to the approval of Bitcoin Spot ETFs, January has been marked by both anticipation and uncertainty. This comes after four months of a bullish run for Bitcoin, hinting at a potentially indecisive or less profitable end to the month.

Fact: Compared to the 39% return in January 2023, 2024 brings a slow start with a 0.62% rise. 

The dynamic landscape of decentralized finance (DeFi) and non-fungible tokens (NFTs) has played a pivotal role in shaping the crypto market’s trajectory. The sharp spikes in these sectors mirror the heightened volatility experienced in the early days of 2024. As we look ahead, the question arises: What does the highly volatile January indicate about the future trends in the crypto market?

Contrasting with the robust 39% return observed in January 2023, 2024 has embarked on a more measured journey with a modest 0.62% rise. The tide seems to be turning in favor of the bulls, evident in the recovery from Grayscale’s Bitcoin trust slowdown to the reclaiming of the $40,000 mark.

As the year progresses, the crypto community eagerly anticipates a bullish trend, fueled by the upcoming Bitcoin halving and potential rate cuts in the months to come. With rising expectations, Bitcoin enthusiasts dare to dream of the cryptocurrency reaching the coveted $100,000 mark.

Check out our BTC price prediction to determine if Bitcoin will reach the $1 Million mark. 

Bitcoin’s Roller Coaster Act

In the opening act of 2024, Bitcoin embarked on a roller coaster ride, with a promising 5% surge igniting the New Year’s rally, propelling its value above the $42,000 mark. Fueled by optimistic expectations and the subsequent approval of Bitcoin ETFs, the cryptocurrency soared to a peak of $49,000 on January 11th. However, the enthusiasm was short-lived, as swift outflows from Grayscale’s Bitcoin Trust triggered a rapid reversal, pulling the price below $47,000 on the same day.

Subsequent days witnessed a more pronounced correction, with Bitcoin dipping to $38,505, testing the 38.20% Fibonacci level. Despite this, buyers took solace in the slowdown of outflows from Grayscale’s Bitcoin Trust and the substantial inflow into Blackrock’s ETF, crossing the $2 billion mark, along with Fidelity’s ETF.

The latter part of the month showcased signs of recovery, setting a bullish stage for February. The rally culminated in a bullish solid engulfing candle formation, piercing above the $43,000 mark. The bullish conclusion to this highly volatile month hints at a sharp upside in the coming month.

Bitcoin Dominance Over The Market

The crypto market landscape unfolds with Bitcoin (BTC) maintaining its stronghold, priced at $42,610.95 and commanding a market cap dominance of 51.12%. Ethereum (ETH), the runner-up, experienced a marginal growth of 0.08%, reaching a price of $2,302.21, securing a 16.92% share of the market cap.

Noteworthy Performances:

• BNB (Binance Coin) demonstrated resilience, priced at $302.22, reflecting a 2.49% rise over the past month, with a market cap dominance of 2.76%.
• Solana (SOL) and XRP showcased notable gains, with SOL reaching $99.67 (a 5.58% 30-day increase) and XRP surging to $0.51, marking an impressive 18.65% rise.

Cardano (ADA), echoing positivity, stands at $0.50 with a 16.86% increase. Avalanche (AVAX) and Dogecoin (DOGE) contribute to the bullish trend among altcoins, with AVAX at $34.56 (up 12.43%) and DOGE at $0.08 (up 12.61%). The crypto market continues to showcase dynamic shifts, leaving enthusiasts eager to witness how the trends evolve in the coming months.

The First Month Of Bitcoin Spot ETF 

The advent of Bitcoin Spot ETFs in the first month of 2024 has triggered notable shifts in the crypto landscape. With insights from various sources, we delve into the market dynamics, focusing on key players and emerging trends.

Source: https://twitter.com/JSeyff/status/1752081949470986329/

Within the initial two weeks, the Grayscale Bitcoin Trust (GBTC), a pioneer among the recently SEC-approved Bitcoin ETFs, stands out with an asset under management of $20 billion. Despite a decline from its peak of $30 billion, GBTC remains a significant player in managing Bitcoin assets.

iShares Bitcoin Trust and Fidelity Gain Momentum

The iShares Bitcoin Trust (IBIT) by Blackrock emerges as a rising force, displaying positive inflows and reaching an impressive $2 billion in assets under management, equivalent to almost 50,000 bitcoins. Meanwhile, Fidelity is on the brink of crossing this milestone with holdings worth $1.941 billion in Bitcoin.

Moreover, excluding GBTC, other US Spot ETFs have collectively acquired almost 140,000 BTC in just 12 trading days, signaling robust activity within the market.

Bittersweet End For Altcoins

Altcoins witness a 3.64% drop in market cap, excluding Bitcoin, culminating in an overall negative month. Hovering around the $750 billion mark, altcoins are poised for a potential reversal, preparing for a more optimistic February.

Amidst market fluctuations, Ethereum Naming Service (ENS), SUI, and Manta Network (MANTA) lead the gainers with impressive performances of 94%, 92%, and 65%, respectively. Conversely, SATS, PancakeSwap (CAKE), and BitTorrent (BTT) experience declines of 36%, 28%, and 27%, respectively.

DeFi Market Rebounds

The DeFi token market, with a total market cap surpassing $85 billion, showcases signs of recovery. Key protocols demonstrate improved network health, while the total value locked across all protocols rises from $54.613 billion to $56.411 billion.

Small-cap DeFi tokens shine in January, with DFI.Money (YFII), UMA, and Alephium (ALPH) boasting growth rates of 202%, 136%, and 93%, respectively. Conversely, Tellor (TRB), BakeryToken (BAKE), and Terra Classic (LUNC) face downturns of 55%, 36%, and 33%.

NFT Market Resurgence

Experiencing an earlier dip, the NFT market sees sales plummet from $237 million to a low of $156 million. However, a subsequent recovery propels sales beyond $210 million, indicating a positive trend for February.

The active market wallets increase by 4.68%, and Legends of Multiverse’s FOUND Smart Claim collection emerges as the top performer, achieving sales of $1.41 million and $1.29 million, contributing to the collection’s overall milestone of $1.36 million.

January 2024 threw Bitcoin and altcoins a curveball.

Speaking of green lights, the arrival of Bitcoin Spot ETFs has sent shockwaves through the market. Grayscale, Blackrock, and Fidelity are all vying for dominance, attracting billions of dollars and fueling the fire. But altcoins haven’t been left in the dust. Although they dipped in January, February whispers of a reversal, with some DeFi tokens like DFI.Money and UMA experiencing meteoric rises.

February promises to be another thrilling chapter in the ever-evolving story of cryptocurrency. Will Bitcoin reach its $100,000 dream? Will altcoins stage a glorious comeback? Only time (and a healthy dose of volatility) will tell.