- Weekend crypto trading volume has declined sharply in 2024 thus far.
- The current market cycle is mirroring the 2020/2021 cycle.
- Bitcoin has several tailwinds that prime it for a potential rally in Q4.
In a recent report, K33 Research outlined how the crypto market has evolved in H1 and the key trends to watch out for in H2.
How crypto performed in H1
With the first half of the year gone, crypto research firm K33 Research released key insights that have shaped the crypto market in 2024. Here are a few noteworthy trends that investors need to watch out for:
- The crypto market is showing a high correlation to the timings of traditional markets in 2024 despite its 24/7 nature. According to K33 Research, only 12% of the weekly crypto trading volume occurred during weekends, compared to an average of 22% between 2012 and 2023. A possible reason for the change could be the launch of spot Bitcoin ETFs, which have altered market dynamics. As a result, investors need to begin watching out for increased volatility than in normal crypto weekends.
- Bitcoin and Ethereum outperformed gold, Nasdaq and the S&P 500 in H1 with a 48% and 50% price growth, respectively. In comparison, Nasdaq, gold and the S&P 500 only grew by 17%, 13% and 15%, respectively. Bitcoin's growth obviously stems from the massive capital that has flowed into spot Bitcoin ETFs. These products raked in 252,488 BTC in H1.
BTC, ETH, Gold, Nasdaq, S&P 500 H1 Performance
- The current market cycle sort of mirrors the 2020/2021 cycle, where momentum cooled in Q2 after Bitcoin retraced from its all-time high. This is visible in Bitcoin's ranging price and daily average volume, which has dried up since seeing a spike in March.
- Altcoins have been heavily affected, with most tokens returning to their 2022 lows. However, meme coins are outliers, as their rally during the March meme coin frenzy saw them posting impressive H1 gains. Newer meme tokens like dogwifhat (WIF) and BRETT were standout performers growing by 1074% and 12,000%, respectively. Meanwhile, older meme projects like DOGE, SHIB, FLOKI, and PEPE increased by 26%, 51%, 335%, and 633%, respectively.
Meme coin YTD Performance
How will the market shape up in H2?
Historically, Bitcoin is weakest in Q3 and strongest in Q4. K33 Research expects Bitcoin to repeat the same pattern, with headwinds from Mt. Gox, the German government, and miners' supply pressure outweighing demand. Potential tailwinds in Q4 from a possible Trump victory in the US elections, lower interest rates, and FTX cash distribution may see BTC gain strength.
BTC Average Quarterly Returns
Additionally, Ethereum ETFs could spark a massive rally in ETH as investors are currently underpricing its impact on the top altcoin. Bitwise chief investment officer Matt Hougan predicted that ETH ETFs could attract up to $15 billion in the first 18 months of trading. As a result, Ethereum-related altcoins, especially DeFi-based, may rally alongside ETH.
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