According to market reports, Bitcoin fell sharply this week and pushed the Crypto Fear & Greed Index down to 10, a level tied to extreme fear.
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Investors and traders are asking whether this marks the bottom of the cycle or just another step lower in a run that has already seen a 25% correction.
Extreme Fear Hits Crypto Markets
Retail panic has been clear. Funding rates on some derivatives desks have turned negative, and newer entrants to the market are showing signs of stress.
Based on reports, large parts of the investor base are worried. That worry is visible in price action and in sentiment gauges that sit at the lower end of their historical ranges.
Some traders are posting bearish calls for attention. Others are quietly adding to positions.
Veteran Analysts Push Back
BULL MARKETS DON’T END LIKE THIS!
I’ve been around for multiple bull/bear markets, 2001 dotcom, 2008 housing, 2017 crypto , 2021 crypto etc etc.
When bull markets end , either something breaks or belief in the asset/ market crumbles.
Ran Neuner, known for his market commentary and social media presence, pushed back against the idea that the pullback signals the end of the bull run.
He pointed to past market cycles — 2001, 2008, 2017 and 2021 — and argued that bull markets usually end only after a real system failure or a collapse of belief.
He used a blunt line on social media: “BULL MARKETS DON’T END LIKE THIS!”
Neuner stressed that in previous eras, people either stopped trusting the entire sector or the financial system itself broke down. He said neither has happened now.
BTCUSD currently trading at $95,353. Chart: TradingView
CZ Tells Investors Not To Panic
Changpeng Zhao, CEO of Binance, told investors that heavy reactions to dips are part of the trading rhythm.
“Every dip, some people think it’s the end of time. Time continues,” he said, trying to calm jittery holders and traders.
That sentiment has been echoed by other market figures who argue that corrections can be steep but still sit inside a longer, upward trend.
Every dip, some people think it’s the end of time.
Reports have disclosed that some signs commonly tied to market endings are absent. Governments are reported to be exploring or adopting Bitcoin in various ways, and blockchains are being integrated by institutions in pilot projects, industry observers say.
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Global stock markets remain near record highs and liquidity conditions are described by some commentators as supportive.
One analyst even claimed that central banks cannot tighten further right now. Those are strong claims and they are not universally accepted, but they form the backbone of the bullish counterargument.
At the time of writing, Bitcoin was trading at $95,301, down 6% in the last seven days, data from Coingecko shows.
Featured image from Unsplash, chart from TradingView
Since the start of the bull market in October 2022, stocks’ move higher has largely been about artificial intelligence and the outperformance of a few large equities, driving investor concern that gains aren’t widespread enough for the rally to continue.
The Roundhill Magnificent Seven ETF, which tracks the group of large tech stocks that led the 2023 stock market rally, is down more than 1.5% in the past five days. Meanwhile, Real Estate (XLRE) and Financials (XLF), both interest rate-sensitive sectors, have been the market’s biggest winners over the same time period. The small-cap Russell 2000 (RUT) index is up more than 7% and finally breached its 2022 high for the first time during the current bull market.
In another sign that a wide swath of stocks are rallying, the equal-weight S&P 500 (^SPXEW), which ranks all stocks in the index equally and isn’t overly influenced by the size of the stocks moving higher or lower, has outperformed the traditional market cap-weighted S&P 500.
Ritholtz Wealth Management chief market strategist Callie Cox told Yahoo Finance the market action as of late has been “refreshing” and could be the sign of a maturing bull market, where a wide range of stocks are contributing to the rally, providing more support for stock indexes at record levels.
“If this trade continues, if the prospect for a rate cut is still in play for this fall, then we could finally see the bull wake up, and that’s good news for all investors,” Cox said.
It’s not the first time strategists have been optimistic about market rotations like the one currently happening. Other spurts of widespread rallies were celebrated in December 2023 and during the first quarterof this year.
The question is whether a big broadening of stock market gains is finally underway this time, or if this is yet another head fake as the market becomes overly optimistic about Fed rate cuts.
“The conviction level that we have is higher right now than back in December [during the Fed pivot-driven market rally],” Bank of America Securities senior equity strategist Ohsung Kwon told Yahoo Finance.
Kwon notes that the narrative driving the rally — hopes of a soft landing and gradual interest rate cuts from the Fed — is largely unchanged from the prior broadening spurts. But this time, he said, “the earnings backdrop is really supporting this rotation as well.”
Bank of America’s earnings analysis shows the 493 stocks not including the Big Tech “Magnificent Seven” are expected to grow earnings year over year for the first time since 2022 during the current reporting period. As seen in the chart below from JPMorgan Asset Management’s midyear outlook in June, the earnings growth of those stocks is expected to pick up in the coming quarters, while Big Tech is expected to see its earnings growth slow.
Given that earnings are typically the key driver of stock prices, this would support the theory of a broadening rally. But the key caveat is that these are just expectations. And given the market’s struggle thus far this year to produce a wide array of winners, some strategists want to see actual earnings growth to confirm the narrative that’s currently seen in the estimates.
“I want to see earnings growth come from more sectors than just tech,” Cox said. “I think that that’s the big theme of this particular season. You know, seeing how many sectors can actually pitch in and move the S&P 500’s profit expectations higher.”
The same could be said for the other narrative backing the recent rotation. Markets are now pricing in a more than 90% chance the Fed cuts interest rates in September, per the CME FedWatch tool. But again, Cox is wary of declaring the broadening will certainly continue.
“Until we’re officially in that rate cut cycle, it’s hard to say that this broadening trade is here to stay,” Cox said. “I hope it is. I’m optimistic it is, but you’re still going to have a market that’s hanging on every piece of economic data that comes across the tape.”
Charles Schwab senior investment strategist Kevin Gordon is also cautious about declaring the big broadening has arrived. Gordon noted “more clarity” on the Fed’s cutting cycle and why it would start cutting remains paramount, particularly for the most interest rate-sensitive areas of the market like small caps.
Gordon reasoned the recent market action has been a “great step in the right direction.” But a broad rally won’t come overnight, Gordon said. He added, “The nature has been for everybody to say that it’s this great rotation, but great rotations tend to take a little bit longer than a couple of days.”
“We could see a little bit of this churn where some stocks are passing the baton to other stocks,” Cox said. “Tech stocks are passing the baton to other stocks. Sure, we may not see prices move up as quickly as they have. But this is the kind of movement that strengthens the foundation of a bull. It means that this rally can be stronger and live longer eventually.”
Charging Bull bronze sculpture in the Financial District of Manhattan, N.Y., on Oct. 23, 2022. The sculpture was created by Italian artist Arturo Di Modica in the wake of the 1987 Black Monday stock market crash. (Photo by Beata Zawrzel/NurPhoto via Getty Images) (NurPhoto via Getty Images)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
Traders work on the floor of the New York Stock Exchange October 13, 2008. REUTERS/Shannon Stapleton
The stock market looks similar to the periods that preceded the dot-com and 2008 market events.
David Rosenberg pointed to the exuberance for AI, which has sparked a “raging bull market.”
The “speculative mania” carrying the stock market could soon end, he warned.
The stock market is flashing the same warning signs of “speculative mania” that preceded the crashes of 2008 and 2000, according to economist David Rosenberg.
The Rosenberg Research president — who called the 2008 recession and who’s been a vocal bear on Wall Street amid the latest market rally — pointed to the “raging bull market” that’s taken off in stocks, with the S&P 500 surpassing the 5,000 mark for the first time ever last week.
The benchmark index has soared around 22% from its low in October last year, clearing the official threshold for a bull market. The index has also gained for the last five weeks and has been up for 14 of the last 15 weeks — a winning streak that hasn’t been seen since the early 1970s.
But the stellar gains are a double-edged sword for investors, as the market looks dangerously similar to the environment prior to the dot-com and 2008 crashes, Rosenberg wrote in a note on Monday.
“With each passing day, this has the feel of being a cross between 1999 and 2007. It is a gigantic speculative price bubble across most risk assets, and while AI is real, so was the Internet, and so were the high-flying stocks that populated the Nifty Fifty era,” he said, referring to the group of 50 large-cap stocks that dominated the stock market in the 60s and 70s, before falling by around 60%
Other Wall Street strategists have warned of the parallels between today’s market and similar stock booms in the past. The hype for artificial intelligence pushed the Magnificent Seven stocks to dominate most of the S&P 500’s gains last year, and a major price correction is on the way as valuations soar to unsustainable levels, Richard Bernstein Advisors said in an October 2023 note.
“This is the problem when a group of mega cap ‘concept’ stocks trade at double the multiple of the rest of the market. The lesson is that (i) the higher they are, the harder they fall, and (ii) there are dangers when too much growth gets priced in,” Rosenberg said. “Being real in an economic sense does not mean we have not entered a realm of excessive exuberance when it comes to the financial markets,” he added, referring to the hype surrounding AI.
The outlook for stocks is also shadowed by an uncertain economic picture. Geopolitical risks, recession risk, and the risk that the Fed will disappoint investors hoping for rate cuts aren’t being priced into markets at the moment, Rosenberg added.
“I don’t find speculative manias a turn-on and in my personal finances, I avoid them like the plague. Not everyone likes to hear that, especially since I missed so much of this rally but that’s how I roll,” he said.
Rosenberg has warned investors to tread carefully before, given the slew of risks he sees ahead for markets. Previously, he said that the S&P 500 looked “eerily similar” to 2022, the year the index plunged 20%. That’s partly because a recession that “few see and few are positioned for” is coming for the economy, he wrote in a post on LinkedIn last month.
Cardano price has made a swift recovery to $0.54 after hitting a 50-day low of $0.43 on Jan. 23, speculative traders are betting big on further gains.
After two weeks of active Bitcoin ETFs trading, the dreaded sell-the-news cycle that saw the global crypto market capitalization shrink by more than $270 billion between Jan. 11 and Jan. 23 appears to have cooled. The $180 billion uptick in the past week has raised optimism across the altcoin markets.
Layer-1 altcoins lead the crypto market resurgence
As the crypto market entered recovery mode this week, prominent Layer-1 coins, including Solana (SOL), Avalanche (AVAX), and Cardano (ADA), have been at the forefront of the rally.
With 24.1% and 20.2% gains, respectively, Avalanche and Solana have collectively added $14.9 billion in market capitalization between Jan. 23 and Jan. 30.
The chart below notably shows that ADA price is trailing with a lower 16% jump.
Cardano (ADA), Avalanche (AVAX), Solana (SOL) price action, Jan 23 to Jan 30, 2024 – Source: TradingView
While Cardano’s 16.2% increase to a $2.2 billion market cap over the past week is nothing to scoff at, vital derivative market data trends observed on Jan. 30 suggest that ADA price could be next in line for a major breakout.
Cardano records 800% spike in funding rate
Cardano and its rival mega-cap layer-1 coins have stolen the show in the crypto spot markets this week, adding billions of dollars in market capitalization. But looking beyond the price charts, derivatives traders appear to be placing unusually large bullish bets on an imminent ADA price breakout.
CoinGlass’s funding rates metric tracks changes in fees paid by futures contract holders to opposing parties, providing insights into market dynamics and dominant sentiment among traders.
Positive funding rates mean that LONG position holders pay short traders to keep their positions open, anticipating that prices will increase and result in larger profits.
The chart below shows that Cardano’s open-interest weighted funding rate rose 800% to hit 0.09% on Jan. 30 after maintaining an average of 0.01% since Jan. 2.
Cardano (ADA) Funding rate vs. Price | Source: Coinglass
The chart above shows bullish speculative traders pay record fees to keep their LONG ADA positions active. Such a rapid increase in positive funding rate often occurs when speculative traders rapidly react to a bullish catalyst.
Given the dominant bullish momentum observed in rival layer-1 altcoin markets this week, this could indicate that traders are betting big on ADA price, potentially catching up to AVAX and SOL, both of which have delivered superior performance.
The historical data trend in the chart also affirms that ADA price has often made a leg-up whenever the Cardano funding rate has recorded comparable spikes.
Cardano price forecast: All eyes on $0.60 resistance
From an on-chain perspective, the current Cardano price uptrend can be attributed to bullish headwinds surrounding the altcoin markets, and the rising funding rates could propel it further.
The Parabolic Stop and Reverse (SAR) technical indicator supports this Cardano price prediction. When the Parabolic SAR dot points below an asset’s current price, it indicates a growing bullish momentum.
In this case, the ADA Parabolic SAR dot pointing to $0.45 while the current price is $0.52 aligns with the bullish on-chain prediction.
Traders may interpret this as a buying opportunity or a signal to go long in the derivatives markets, anticipating further Cardano price appreciation.
If this scenario is predicted, the bears can mount initial resistance at the $0.55 milestone price. However, a decisive breakout could set off margin call triggers and short squeeze alerts, possibly sending ADA prices above $0.65 for the first time in 2024.
Conversely, the bears could invalidate this optimistic price forecast if a downswing below $0.40 is forced.
However, as outlined by the SAR chart, the support at $0.45 could prove daunting. Traders taking highly leveraged positions could make frantic purchases to avert major losses once prices approach the $0.45 area, likely triggering another price bounce.
Market optimism subsided in January, but some tokens are rising contrary to general trends. Which coins have become the top five fastest-growing cryptocurrencies this month?
The digital coin market, despite its peculiarities, is considered a potentially profitable investment instrument. The tokens listed below have managed to maintain their market positions and experience rapid growth despite the unpredictable market situation.
Sei (SEI)
Sei Network is an independent blockchain built on software solutions from the Cosmos ecosystem. The developers position it as a network for high-frequency trading applications with high transaction processing speed. In April 2023, the project raised $30 million from Jump Crypto, Multicoin Capital, and Flow Traders at a valuation of $800 million.
The Sei Network blockchain project released its own SEI token in August 2023, organizing its partial sale through the Binance Launchpool platform and distribution in the form of an airdrop to active users who took part in testing the project at an early stage.
Since its launch, the token has surged by 7622%, reaching a price of $0.617. It became one of the fastest-growing cryptocurrencies in January, with a 51.76% increase in price since the beginning of the year. Meanwhile, there are no apparent reasons for SEI to grow in January 2024, as the project has yet to announce any fundamental changes.
Source: CoinMarketCap
Pendle (PENDLE)
Pendle is a protocol that allows tokenization and trading of future returns. By creating a new AMM that supports time-decay assets, Pendle gives users more control over future returns by providing optionality and the ability to leverage it. This allows the trader’s strategy to be more flexible.
Since August 2023, the price of PENDLE has experienced rapid growth. The rise has significantly accelerated in the last four weeks, resulting in a multi-year high of $2.47 and a 110% increase, earning it the title of the fastest-growing coin in the crypto market. However, the token was trading below its all-time high of $3.83 on November 16, 2021.
Source: CoinMarketCap
The project team’s significant activity can explain the token’s rapid growth in recent weeks. Over the past month, Pendle has launched several initiatives, including the launch of rsETH from Kelp DAO.
Introducing Pendle LRT’s newest addition – rsETH by @KelpDAO 🚄
With this, you’ll finally be able to start racking up Kelp Miles faster than anyone else, while earning great yields and rewards from Pendle at the same time. 🚀 pic.twitter.com/Gt7bdD22wW
Astar Network is a multichain that acts as a hub for decentralized applications (dapps). According to the developers’ plans, the Astar network can become a hub for smart contracts in the Polkadot ecosystem. This project offers users well-developed tools for scaling blockchains and decentralized applications. Astar positions itself as the premier hub for everything powered by decentralized technology. This is a tool for scaling applications across different blockchains.
Examining the list of sponsors and partners reveals a clear trend toward the widespread adoption of multichain technology for smart contracts across various platforms and blockchains. Universality is seen as a key strategy for achieving scalability and enhancing the profitability of decentralized platforms.
Over the past month, the native token of the ASTR project has surged by nearly 60%, reaching a value of $0.1725. Several important announcements contribute to the current status of ASTR as one of the highest-growing cryptocurrencies.
Source: CoinMarketCap
Recently, Astar Network revealed its plans to release tokenomics, zkEVM, and other updates within the next two months. The founder of the project, Sota Watanabe, announced that the launch of the Astar zkEVM leading network is scheduled for early 2024.
Maker (MKR)
MakerDAO is an Ethereum-based contract platform that allows you to issue the stablecoin Dai against cryptocurrencies and real assets. The name of the platform comes from the term “market maker”. The project operates and develops in an utterly decentralized manner with the help of DAO. The governance token of MakerDAO is Maker (MKR).
The token has seen steady growth over the past year, with the MKR price rising along a steep upward support line since June last year. This line was tested for strength in August, after which the token resumed its growth.
In January, the coin broke the critical mark of $2,000, rising in price by more than 45% in a month and becoming one of the top three fastest-growing altcoins for January, according to CoinMarketCap.
Source: CoinMarketCap
Sui (SUI)
The Sui Network is a relatively new blockchain project launched on May 3, 2023, to address issues related to the centralization of digital assets. The Sui Network team is confident that achieving this goal will propel them to become one of the leading platforms in the world.
In January, the Sui Foundation, in collaboration with Mysten Labs, announced Sui Basecamp, the first global conference scheduled in Paris in April. The event will bring together developers and partners worldwide as the web3 community gathers for Paris Blockchain Week.
Source: CoinMarketCap
Since its launch in early May 2023, SUI has dropped in price by 30%, recording an all-time low on October 19, 2023. However, by the end of the year, the token gradually recovered, rising in price from $0.3643 on October 19 to $1.20 at the time of writing. Over the past month, the token has confidently demonstrated an upward trend, rising in price by 42%.
Fastest-growing crypto this week
This week’s top 3 crypto gainers included cryptocurrencies associated with blockchains.
The apparent leader of the week from Jan. 22 to 26 was Manta Network (MANTA). The price of MANTA has been rising along an ascending support line since the coin was listed on Binance on Jan. 18th. It remained below the horizontal resistance area at $2.65 during this time. After bouncing off the trend line on Jan. 23, the token accelerated its growth rate and made a bullish breakout of this horizontal area the next day. The coin is currently trading at $3.09, having risen in price by 40% over the week.
Following closely behind is Chiliz (CHZ), a project that helps sports fans participate in the lives of their favorite teams using CHZ fan tokens. The token began to recover from the downtrend and reached a price of $0.11, having risen by 27% over the past week.
The Pyth Network (PYTH) closed the top three, with an increase of almost 23% over the past week. The coin rose in price to $0.40. One of the growth drivers was the news that network staking reached new heights with 110,000 wallets.
The Pyth Network is built on the idea that financial data is valuable and not always available for free. Instead of approximate data, Pyth uses first-party financial data to contribute directly to the blockchain.
Summing up
When analyzing the profitability of cryptocurrencies, it’s crucial to consider the significant growth rate of crypto movers. Resist succumbing to FOMO and assess whether you might be entering a particular coin too late. The value of a cryptocurrency is determined by supply and demand on leading digital currency trading platforms. Various factors can influence cryptocurrency prices, including current market sentiment, news events, important announcements, and changes in regulatory approaches. Considering these factors, the value of cryptocurrency can fluctuate over short periods, making it a highly volatile investment.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
FAQs
What is the fastest-growing cryptocurrency?
As of the current writing, the fastest-growing cryptocurrency right now is the Pendle project’s token. Since the start of the year, the coin has experienced a remarkable price surge of over 110%, accompanied by a steady increase in trading volumes and market capitalization.
What is the next cryptocurrency to boom?
It’s challenging to predict it with certainty. Many experts believe that Bitcoin (BTC) has significant potential for future growth. The approval of spot Bitcoin ETFs and the upcoming halving event in 2024 contribute to a positive forecast for the first cryptocurrency’s rate. Historical data suggests that halving has historically propelled Bitcoin to new highs. Additionally, the introduction of a spot Bitcoin ETF in the U.S. may attract capital from institutional investors to the market.
Which crypto will recover the fastest?
While it’s impossible to make definitive predictions, many experts believe that Ethereum (ETH) is positioned for a swift recovery. The coin has garnered increased attention in recent weeks, fueled by excitement surrounding Ethereum spot ETFs in the U.S. Expectations of positive developments could potentially propel ETH to new heights.
Which fastest-growing cryptocurrency to invest in?
Determining the ideal fastest-growing cryptocurrency depends on various factors, such as your investment strategy, risk tolerance, and financial goals. There’s no one-size-fits-all answer. For example, for a long-term accumulation strategy, prominent options to consider include BTC, Ethereum (ETH), or BNB from Binance. It’s crucial to conduct thorough research and align your choices with your specific investment objectives.
In a Jan. 19 video on Crypto Banter, Kyle Chassé, the founder of Master Ventures, shares why he believes this year will result in $100,000 BTC and $7,000 ETH.
Chassé predicts that Bitcoin will hit $100,000 this year, although these prices won’t be seen until around May when the post-halving rally starts. In the meantime, the analyst suggests that 15%-20% pullbacks are likely. To back up his prediction, Chassé points to the Bitcoin (BTC) charts to highlight that massive buy pressure from institutions is much more than the market has seen up until now.
The analyst relates that unlike the retail buyer, institutions don’t care about BTC prices, they care about how many assets they have under management (AUM) since ETF issuers charge management fees to earn their money. Moreover, with all the money invested into legal fees, efforts, and commissions, institutions expect a certain level of interest in what is likely to be a long-term play, a bullish sign for the market.
Since Ethereum isn’t in the institutional realm, Chassé also predicts Ethereum (ETH) will be the next play since there is no place for ETH inflows from ETFs yet. It is the only other cryptocurrency that has a chance of getting institutional approval this year. Based on this the analyst predicts a possible ETH season with prices likely to hit between $6,000 to $7,000.
Chassé also shares that he views Solana as a blue chip, predicting that SOL will outperform ETH this year, hitting the $500 to $1,000 range one day. He attributes this to institutional interest from major players like Franklin Templeton, an American multinational holding company.
In referencing the 2021 bull run throughout his predictions, it is worth noting that the cycle was previously led by a Bitcoin price of $69,000 in November 2021, with increased growth evident during the COVID-19 pandemic and the market seeing a rising demand for digital payment solutions. Following this run, the market lost $2 trillion in value in the following year and is only now looking at making a comeback.
Solana (SOL) showed the best performance among the top 10 digital assets by capitalization. What caused this rapid growth following a significant decline?
In 2023, Solana showcased exceptional success, in stark contrast to Ethereum (ETH). While SOL surged over 1000%, ETH saw only a 90% increase.
To better understand Solana’s ecosystem scale and recovery pace, let’s examine crucial blockchain metrics from the time of the FTX crash on Nov. 11, 2022.
FTX bankruptcy
When the cryptocurrency exchange filed for bankruptcy on Nov. 11 last year, Solana’s metrics had already significantly declined from their peak values.
For instance, SOL’s price dropped from $62 to $17, and the daily trading volume decreased from $6.7 billion (108 million SOL) to $2.2 billion (130 million SOL).
Source: CoinMarketCap
The exit of a major investor and the risk of coin sales triggered Solana’s fall, leading crypto community members to predict its imminent demise.
Solana’s co-founder and CEO, Anatoly Yakovenko, acknowledged that the significant decline in SOL resulting from the FTX collapse was a “bitter pill to swallow.” Still, these unpleasant moments paled compared to the damage caused to ecosystem projects.
About 20% of Solana-based projects received investment from the crypto exchange FTX or its subsidiary Alameda Research, and only 5% of startups in the ecosystem held funds on this trading platform. Yakovenko expressed sympathy for the project creators who worked to raise capital and trusted FTX as the custodian of funds.
Project rise
Despite the negative forecasts, Solana survived and began its recovery. Experts attributed the project’s “survivability” to the team’s use of stress testing to fix bugs.
Solana’s active growth occurred during the publication of the court decision in the FTX case. The founder of the crypto exchange, Sam Bankman-Fried, was found guilty of all charges.
Now freed from a powerful partner’s pressure, Solana’s fate seems clearer, enhancing its investment appeal. Crypto industry representatives have started discussing Solana’s potential to lead the next bull market, evident in the large volume of open long positions, showing investors’ confidence in its positive trajectory.
Development of Solana and its impact on the ecosystem
Despite pessimistic forecasts and a general decline in network activity following FTX’s bankruptcy, the Solana developers remained proactive. The blockchain has undergone several significant technical updates and innovations throughout the past year. Since the summer of 2023, Solana has introduced new defi services, including lending platforms, LSD protocols, and decentralized exchanges (DEX). The developers aim to create a new generation of platforms with “healthy” tokenomics and high-quality UI/UX.
The validators’ migration to client version 1.16 at the end of September 2023 optimized memory usage, expanded support for zero-knowledge proofs (ZKP), and integrated confidential transfers with the new token standard. The update also increased the stability of the network and reduced the hardware requirements for validators. Version 1.17 is expected to add even more ZKP integration capabilities.
Another major improvement was the introduction of State Compression in April 2023. The solution makes storing data outside the main network cheaper by using on-chain hashes to prove its authenticity.
Meme coins powered by Solana
The end of the year witnessed notable excitement surrounding Solana-based memecoins, with one of the standout tokens being Bonk. Bonk, a meme coin operating on the Solana blockchain and depicting a Shiba Inu dog, resembles the largest meme cryptocurrencies such as Dogecoin (DOGE) and Shiba Inu (SHIB).
Introduced early in January of the same year, Bonk initially sparked short-term excitement, followed by a systematic price decrease until the end of October, after which it began to experience rapid growth. The surge in the coin’s price might have been triggered by the increase in the Solana blockchain token’s value, generating interest in assets within this network, including BONK.
The escalating demand for the rising token value resulted in a tenfold surge in Saga smartphone sales by Solana developers. Individuals owning the device are eligible for a complimentary distribution of BONK tokens, whose quantity, at the current rate, covers the smartphone’s cost. The company restricted sales to one device per person.
What lies ahead for Solana
VanEck analysts published a report presenting several forecasts for the price of SOL by 2030. The pessimistic scenario projects a coin price of $9.81, while the most optimistic scenario reaches $3211.28.
Experts suggest Solana could potentially be the first blockchain capable of accommodating applications with over 100 million users. However, VanEck believes Solana’s monetization will only reach about 20% of Ethereum’s due to “fundamental differences in the philosophies of the communities of the two projects.” This may result in less than half of Ethereum’s market share.
Experts also anticipate decentralized exchanges’ market share will reach an all-time high as high-performance networks like Solana enhance user trading experiences. They predict the Solana blockchain will rank among the top three in market capitalization, TVL, and active users.
While the initial forecast regarding the token price may appear challenging to achieve given current token values, the second forecast seems reasonably realistic. In January, SOL secured its place in the top five cryptocurrencies by market capitalization, surpassing Ripple (XRP) and BNB.
RootData, a provider of visual and structured data on companies in the digital finance industry, has published a list of deceased crypto projects that failed to make it through 2023.
The biggest names to make the list were Prime Trust, Yield Protocol, Wyre, Multichain and Clockwork. In total, the RootData list included 116 crypto projects that announced their closure or bankruptcy in 2023 and had inactive Internet resources for a long time.
RootData analysts note: in total, the funds previously allocated for creating and financing “dead projects of 2023” exceeded $940 million.
The most difficult period and the peak of the most high-profile fiascoes was the second half of 2023. At the end of June, amid the consequences of the crypto winter and Bolt Financial’s refusal to purchase, the Wyre payment platform closed. In July, after the arrest of its founder and a series of hacks, Multichain went bankrupt.
In August 2023, due to financial problems, the custodial service Crypto Custodian Prime Trust announced its bankruptcy. At the same time as Prime Trust, the Solana blockchain-based smart contract automation project Clockwork ceased to exist due to “limited commercial potential.”
October saw the closure of DeFi crypto lender Yield Protocol, which announced that the cessation of operations was due to a “lack of regulatory safety and sustained demand for fixed-rate borrowing.”
At the same time, 2023 was the year of recovery of the cryptocurrency market. Its capitalization has more than doubled in 12 months, rising from $830 billion to its current $1.66 trillion. Bitfinex analysts expect the cryptocurrency market capitalization to reach as much as $3.2 trillion in 2024.
The bull market in stocks could even run on until 2026 if business and fiscal conditions align, one market veteran says.Reuters / Paulo Whitaker
The S&P 500 could be on track to notch a new record next year, according to market vet Phil Orlando.
The Federated Hermes chief stock strategist said the Fed was likely done with its rate hikes.
That means the second leg of the bull market has room to run on into 2024, he predicted.
The bull market in stocks has more room to run, and it could take the S&P 500 to a new high by the end of next year, one market veteran says.
That’s the thesis of Phil Orlando, the chief equity strategist at Federated Hermes. Orlando sees the S&P 500 surging to 5,000 by the end of 2024, representing an upside of around 10% from the benchmark index’s current levels.
“We think that stocks are going to grind higher. They’ve gone from 4100 to 4500. And we think that’s a trend that’s got legs,” Orlando said in an interview with Bloomberg Surveillance on Monday.
His optimism comes largely because he thinks the Fed is done hiking interest rates. Central bankers have already raised rates 525 basis points over the last 20 months to lower inflation, a move that hammered stocks in 2022.
But inflation has cooled dramatically from its highs last summer. Prices rose just 3.2% year-per-year in October, lower than the expected 3.3% increase, the Consumer Price Index report showed last week.
The case for the Fed to stop interest rate hikes is also supported by the recent surge in bond yields, with the yield on the 10-year US Treasury briefly surpassing 5% last month. Higher bond yields influence other interest rates in the economy, which have also helped tighten financial conditions.
“The bond market’s done the heavy lifting for [the Fed] since the last Fed rate hike in July,” Orlando said on Bloomberg. “That gives the Fed the luxury, in my view, to step back and say, you know what, we don’t have to hike any more. We can just sit here on the sidelines for the next year and allow the gradual slowing of inflation to occur.”
Markets are now pricing in an 81% chance the Fed could cut rates in the first half of next year, according to the CME FedWatch tool.
Equities have been rallying in November as investors assess the more positive outlook for rates. The S&P 500 has climbed 7% over the past month, trading around 4,535 on Monday. That rally could even continue into 2025 and 2026, Orlando said, especially if the upcoming election cycle encourages more market-friendly business and fiscal policies.
Coinciding with the crypto market’s newfound bull run, Solana (SOL) has made significant strides, rising by over 175% in the last 30 days.
The recent crypto market upturn has not only propelled Bitcoin (BTC) to an 18-month-high but also triggered massive gains for Solana, effectively pushing it over the $20 billion market cap milestone.
FTX wallets unstake $160M in SOL
Recently, analysts at Lookonchain reported a substantial unstaking of $160 million worth of SOL from FTX-linked wallets. This move resulted in a dip in the price of Solana’s native SOL token, dropping to around $40, before orchestrating a recovery. Despite this significant unstaking event, Solana’s price is still holding strong.
Popular crypto trader, Bluntz, observed a consistent selling pattern by FTX, ranging between 250k-700k SOL daily for the past two weeks. Surprisingly, this selling pressure hasn’t deterred SOL’s price, suggesting a robust absorption capacity. The analyst anticipates a further Solana price surge once this selling pressure subsides.
FTX has been selling between 250k-700k $SOL every day for the last 2 weeks while price has either been going up or sideways.
so far its been getting absorbed like a champ and at current rate their unlocked tokens should be depleted within a week.
The latest data from CoinGecko shows Solana exchanging hands for $60.39, representing a 183% increase over the past 30 days.
With a circulating supply of 420 million SOL, its market cap stands at $25.2 billion.
Solana’s exceptional growth in 2023 positions it among the top three layer-1 blockchains, challenging Ethereum and Binance Chain with its unique technology and growing user base.
The journey of Solana in 2023 showcases a compelling narrative of growth, overcoming market challenges, and demonstrating resilience.
Bitcoin’s surge past $35,000 on the 24th and 25th of October took the crypto world by surprise, as it indicated what might be the beginning of a new bullish sentiment. Trading volumes for the world’s largest cryptocurrency hit their highest levels since March, showing that interest in Bitcoin is booming once more.
The entire crypto market saw an inflow of funds during the week, leading to a surge in market cap. Data from CoinGecko shows that the entire market cap increased from $1.184 trillion on Sunday, October 22, to $1.312 trillion on Wednesday, October 25. Most of this inflow went into Bitcoin, which saw its share of the cryptocurrency market increase from 49.58% to 51.47 % during this same time period.
The recent boom in Bitcoin and cryptocurrency prices pushed Bitcoin daily trading volumes on crypto exchanges to their highest level since March. According to The Block’s data dashboard, the seven-day moving average for spot exchange volumes across multiple exchanges hit $24.12 billion on Thursday and $23.98 billion on Friday, respectively. In comparison, Bitcoin trading volume on exchanges was at $11.02 billion on the first day of the month.
Trading volumes are an important metric because higher volumes suggest greater interest and activity in a market. It means more people are actively buying and selling, leading to more liquidity and volatility.
Whale activity also increased during this time period, as indicated by on-chain trackers. Whale transaction tracker Whale Alerts has shown various BTC transactions amounting to millions of dollars to and from crypto exchanges.
Bitcoin has since formed a resistance level around $35,000 and is now trading in a range. At the time of writing, Bitcoin is trading at $34,150, still up by 14.47% in a 7-day timeframe. While price action seems to be moving sideways at the moment, there are still hopes of continued momentum from the bulls to push BTC past $35,000 in the new week.
Matt Hougan, CEO of crypto index fund manager Bitwise, has hinted at a further inflow of money into Bitcoin. Hougan makes this prediction on spot Bitcoin ETFs to project an inflow of around $50 billion within the first five years of its launch. Others like crypto financial services platform Matrixport have made more optimistic claims.
Data from analytics platform mempool.space has shown a sustained increase in activity on the BTC network. If bulls continue to maintain a strong push, we could see Bitcoin reach as high as $45,000 in the early days of November.
Bitcoin (BTC) recently reached $35,000, sparking optimism in the crypto market. IntoTheBlock has analyzed key factors shaping its future, from institutional interest to cyclical patterns.
Institutional support for Bitcoin
Crypto market data analysis platform IntoTheBlock takes a dive into Bitcoin’s on-chain metrics this week, shedding light on its immediate and long-term prospects. Bitcoin’s resilience is evident, buoyed by both tactical strategies and institutional backing.
We analyzed on-chain metrics regarding Bitcoin’s outlook in this week’s newsletter. Bitcoin is showing strength both from a tactical and longer-term perspective, with institutional demand reinforcing cyclical tailwinds. Read the article for more details👇https://t.co/1KpxdAHpcR
According to the report, Bitcoin’s fees have surged by 44.8%, mirroring increased transaction activity during the recent price rally. Meanwhile, Ethereum’s (ETH) fees have nearly doubled in just seven days, propelled by Uniswap’s transaction volumes, which reached their highest levels since June.
Exchange netflows, measuring the net balance of crypto assets flowing in and out of centralized exchanges, tell an important story. Bitcoin, during this week, recorded $190 million in outflows, signifying a trend of assets leaving exchanges. In contrast, Ethereum saw $100 million in inflows, pointing to growing interest.
Bitcoin after $35k
Bitcoin has finally touched $35,000, a milestone unseen since May 2022. Bitcoin has already experienced growth of over 100% this year, which serves as an indication of the market’s robustness.
According to the report, numerous factors contribute to the assessment that the crypto market may enter a phase.
In terms of transaction volume, there has been an increase in Bitcoin blockchain transactions exceeding $100,000. This surge points towards involvement from investors.
Notably, the advent of Bitcoin spot ETF applications has further fueled the appetite of whales and institutions for Bitcoin. A similar surge in high-value transactions occurred in late June following BlackRock’s ETF filing. Today, these transactions have exceeded those levels, aligning with Bitcoin’s new yearly highs. This upswing in institutional activity might foretell what lies ahead in 2024.
Bitcoin price levels
Based on on-chain data tracking buying activity, significant price levels that Bitcoin might target can be identified.
The recent $35,000 mark represents the next resistance point, with 664,000 holders acquiring 340,000 BTC.
If this level is surpassed, the next concentrated trading activity is expected to be around $38,000-$39,000, where 333,000 BTC were acquired.
In case of a correction, buying activity seems to concentrate just above $30,000, with 553,000 BTC changing hands.
Biden’s influence on Bitcoin
In parallel news, there are reports that President Joe Biden is summoning tech executives to the White House to unveil new regulations.
Some believe these regulations, if enacted, could have implications for the crypto industry. Such developments carry significance for Bitcoin and crypto enthusiasts, who must monitor these proceedings closely.
Arthur Hayes’ insights
Arthur Hayes, the former CEO of BitMEX, offers a unique perspective. He believes that Bitcoin is signaling future growth.
According to him, as the United States becomes more involved in global conflicts, the risk of worldwide escalation increases.
Simultaneously, the US Federal Reserve faces ongoing inflation but has paused interest rate hikes. This dynamic creates an environment that might favor assets like Bitcoin and gold, especially during global inflation driven by war.
Bitcoin price analysis
Currently, Bitcoin is priced at $33,986 and has risen by 14% over the past seven days, per data from CoinGecko.
With a circulating supply of 20 million BTC and a market cap valued at $665,905,427,610, Bitcoin remains quite promising.
The RSI value for Bitcoin stands at 83.7, indicating support around the $30,000 level. If this positive momentum continues, Bitcoin might potentially target resistance at $40,000.
Market sentiment on Chinese stocks hit rock bottom just weeks ago after President Xi Jinping secured a historic third term in power and stacked his top team with loyalists in a clean sweep not seen since the Mao era.
But in the past week, a series of unexpected steps by Beijing — the easing of draconian zero-Covid restrictions, moves to salvage the ailing property sector and Xi’s personal return to the world stage -— have triggered a huge rally.
Hong Kong’s benchmark Hang Seng
(HSI) Index has gained 14% since last Friday, putting it squarely into bull market territory, or more than 20% above its recent low. A key index of Chinese stocks in New York jumped 15% during the same period.
On the tightly controlled mainland markets, Shanghai and Shenzhen stocks have also advanced more than 2%.
“China continued to see a barrage of upside activity… as reopening measures are a clear buy signal,” said Stephen Innes, managing partner for SPI Asset Management. “We are in a sea change after China’s more progressive policy evolution arrived unexpectedly.”
Investors now have a “tactically constructive” view on China after key concerns were addressed by credible policy actions, according to Bank of America’s monthly survey of Asian fund managers released on Wednesday.
Some investment banks even upgraded their China growth forecasts following the policy changes. On Wednesday, ANZ Research hiked its China GDP forecast to 5.4% for 2023 from 4.2% previously.
“The changes reflect the party leadership’s intention to stop losses. They want to correct the market’s perception of China’s economic outlook, as President Xi Jinping interacts with global leaders at G20,” it said.
Investors sold off China stocks in October due to fears that Xi’s tightening grip on power would lead to the continuation of existing policies, such as zero-Covid and the common prosperity campaign, that have dragged down the economy and battered financial markets.
A leadership team loyal to Xi also suggested that China may continue to prioritize ideology over the kind of pragmatic decision-making that had enabled the country’s swift economic rise over the past four decades.
But the latest policy shifts, although not a full-throated economic opening, have been enough to excite investors and analysts waiting for any sign of China easing its rules.
From Bali to Bangkok, Xi returned to the world stage after a near three-year absence. There were encouraging signs, in particular, coming from the historic meeting between Xi and US President Joe Biden on Monday, which fueled expectations for stronger economic ties between the two major world powers.
“The US’s willingness to set a ‘floor’ on US-China relations likely means the US is keen to find common ground with China to prevent extreme outcomes,” said Jefferies analysts in a research note earlier this week.
Chinese companies on Wall Street have been hammered by delisting risks since last year because of a simmering spat between the two countries over audits. In December, US regulators finalized rules to ban trading in shares of Chinese companies if they can’t access their audit papers, a request that had been denied by Beijing on national security grounds.
“We believe the Xi-Biden meeting could reduce the risk of Chinese ADRs being delisted,” the Jefferies analysts added.
In August, the two countries reached an agreement to allow US officials to inspect the audit papers of those firms, taking a first step toward resolving the dispute.
Reuters also reported Wednesday that US regulators gained “good access” in their review of auditing work done on New York-listed Chinese firms during a seven-week inspection in Hong Kong.
Despite this week’s rally, some analysts remain cautious. Qi Wang, CEO of MegaTrust Investment in Hong Kong, said the recovery may be driven by a lot of buying to close out previous short positions and money chasing quick returns.
“I don’t think the long-term appetite for China and Hong Kong shares will return so quickly. Right or wrong, there were some fatal blows to global investor confidence earlier this year,” Wang said.
“There is some good news recently, but the big institutional money still need time to assess the situation, including the economic prospect for next year,” he added.
Including the recent surge, the Hang Seng index is still down 23% this year, making it one of the world’s worst performing indices. The Nasdaq Golden China Index, a popular index tracking Chinese companies in New York, has plunged more than 33% so far in 2022.
“This week’s rally is a strong over-reaction to mildly positive news,” said Brock Silvers, Hong Kong-based chief investment officer at Kaiyuan Capital, a private equity investment firm. “The market was desperate for good news, but it’s foolish to think that once Covid is behind us we’ll return to the go-go days of high octane growth.”
Silvers added that the economic factors and political risks that made China “uninvestable” a month ago are still prevalent and are likely to reassert themselves before long.
China is still dealing with Covid outbreaks and remains firmly committed to measures long abandoned by most other nations. Even more serious is the real estate crisis and the risks that poses for the banking sector, he said, adding that the 16-point rescue plan Beijing announced last Friday did not go far enough.
Hao Hong, chief economist for Grow Investment Group, described the rally as sentiment-driven and technical in nature, because the market was previously oversold to an epic level.
But as winter is coming, Covid cases are set to rise.
“Whether we could deal with the resurgence with adequate medical facilities and without panic remains to be seen,” he said, adding it also remains uncertain how effective the new property support measures are and whether the developers can “rise from ashes.”
If China re-tightens Covid restrictions or US-China tension flares up again, market sentiment could plummet once more, he said.
