Glassnode & Coinbase: 2024 Q3 Cryptocurrency Market Guide
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Glassnode & Coinbase: 2024 Q3 Cryptocurrency Market Guide
Exploring the rapid growth of on-chain activity, the transformative impact of ETFs, and the current stage of the market cycle.
Navigating Web3 tides with focused insightsWritten by: Glassnode
Translation: Baic Blockchain
We are pleased to release the third edition of our quarterly Guide to Crypto Markets series, produced in collaboration with Coinbase Institutional. This report provides an in-depth analysis of key developments across the crypto markets each quarter, including price performance, on-chain analytics, industry events, and derivatives data.
As in previous editions, our goal is to provide institutional traders and investors with a deeper understanding of digital asset markets through actionable insights grounded in on-chain data. This edition focuses on three main themes: rapid growth in on-chain activity, the transformative impact of ETFs, and an analysis of the current market cycle.
Key Highlights:
Market Cycle Assessment: Cryptocurrency markets are known for their distinct boom-and-bust cycles. The latest data suggests we may be in the mid-phase of the current bull market cycle that began at the end of 2022, despite a pullback during Q2. Historical patterns indicate such corrections are typical and consistent with prior market behavior.
ETFs Reshape the Landscape: Spot Bitcoin ETFs have amassed nearly $50 billion in assets under management (AUM) within six months, attracting new investors and deepening market liquidity. These ETFs introduce a regulated and familiar investment vehicle that complements existing options, creating positive ripple effects across the broader crypto ecosystem.
Rapid Growth in On-Chain Activity: Over the past six months, various metrics—including total value locked (TVL), active addresses, and user base size—have shown significant increases in on-chain activity. This surge is driven by diverse use cases such as lending, staking, and trading. As existing use cases mature and new innovations emerge, on-chain adoption is expected to grow further.
1. Key Trends in Q3
Below are some trends from the past quarter worth noting from an investor perspective:
1) Investor Profitability Trends and MVRV
MVRV momentum is a tool that helps analysts monitor market trends by tracking changes in the multiple of unrealized profit held by investors (MVRV) relative to its 365-day moving average.
When MVRV trades above its 365-day average, it typically signals a strong upward trend and improved investor profitability, often leading to increased positioning during market pullbacks. Conversely, when MVRV falls below the 365-day average, it often indicates substantial unrealized losses, increasing uncertainty and risk-off behavior.
In early July, the MVRV ratio found support near its 365-day moving average, indicating that the 2024 uptrend remains intact and investor profitability stays positive.
2. BTC Cycle Performance and Pullback
Bitcoin has appreciated by 400% during the current bull market that began at the end of 2022. Following the FTX collapse, Bitcoin experienced 18 months of steady appreciation, reaching an all-time high of $73,000. The market then entered a three-month consolidation phase, followed by a -26% drawdown.
This downtrend was more gradual compared to previous cycles, suggesting stronger market structure and reduced volatility. The 2023–24 cycle resembles the 2018–21 and 2015–17 cycles, offering valuable insights into cycle structure and duration.
1) Spot Bitcoin ETF Balances
Tracking the balances of the top ten U.S.-listed spot Bitcoin ETFs provides insight into capital flows into these products. Spot Bitcoin ETFs have achieved unprecedented success, amassing over $50 billion in AUM, making them the most successful ETF launch in history.
Since their launch, inflows into these ETFs have significantly outpaced new Bitcoin issuance, creating substantial demand. This heightened demand has driven increased trading volumes across both spot and derivatives markets.
2) Bitcoin Futures Volume and Open Interest
Trading volume and open interest in Bitcoin futures have surged significantly. Both traditional and perpetual futures show increased participation and liquidity, reflecting growing interest in Bitcoin derivatives.
To dive deeper into these and other topics and enhance your digital asset investment strategy, check out the full version of the Q3 2024 Guide to Crypto Markets.
Download the full report here.
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