2024 Q3 Crypto Market Outlook: Uptrend Continues, ETFs Significantly Boost BTC Demand
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2024 Q3 Crypto Market Outlook: Uptrend Continues, ETFs Significantly Boost BTC Demand
When the MVRV ratio finds support (does not fall below), it is usually a good time to buy. Currently, the MVRV ratio has rebounded from the support level, indicating that the upward trend is still continuing.
Navigating Web3 tides with focused insightsAuthor: CRYPTO, DISTILLED
Compiled by: TechFlow
Coinbase has just released their Q3 2024 "Outlook for Crypto Markets."
It's packed with insights. I've read all 60 pages—so you don't have to.
Here are the key takeaways you need to know:
Market Value to Realized Value (MVRV):
The MVRV ratio is a metric used to assess market sentiment and price volatility in cryptocurrencies. It compares the current market price of a cryptocurrency with the average price at which holders acquired it.
During market corrections, when the MVRV ratio finds support (does not fall below), it typically signals a good buying opportunity. Currently, the MVRV ratio has rebounded from its support level, indicating that the upward trend remains intact.
Source: Glassnode
Bitcoin ROI from Cycle Lows:
Bitcoin has gone through four market cycles, each characterized by bull and bear price movements. The current cycle began in 2022, and since the November 2022 low, BTC has risen approximately 400%. This cycle resembles the 2018–2022 period, during which BTC surged 2000% from its low. We may experience several months of sideways consolidation.
Source: Glassnode
Declining Correlations in Crypto:
In Q2, correlations among crypto assets declined, with ETH at 0.7 and some altcoins below 0.5. This decoupling suggests deeper market understanding of fundamentals and more dispersed returns. Correlations are expected to continue falling as regulation becomes clearer and institutional adoption grows.
Source: Coinbase
Perceived vs. Actual Volatility:
The introduction of U.S. spot crypto ETFs is transforming the crypto paradigm, expanding investor access and reducing perceived volatility.
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Perception: Digital assets are seen by many investors as overly volatile.
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Reality: Market cap-weighted volatility in crypto markets is comparable to that of major tech stocks.
Source: Tephra Digital
Impact of Spot ETFs:
Spot ETFs have significantly increased demand for BTC, while supply remains limited to miner rewards. Since launch, ETF demand has far outpaced the rate of new BTC issuance.
Source: Glassnode
Ethereum Market Cycle:
ETH has completed two full market cycles. The current cycle began in 2022, and since November 2022, ETH has gained over 150%. This mirrors the 2018–2022 period, when ETH surged 6000% from its low. However, ETH faces notable short-term challenges. Whether ETF products can drive a sustainable long-term recovery remains to be seen.
Source: Glassnode
Ethereum Total Value Locked (TVL):
TVL tracks the value of altcoins and stablecoins locked in smart contracts and decentralized applications (dApps), reflecting financial activity and liquidity. In Q2, TVL rose by 9%, signaling growing activity on the Ethereum blockchain.
Source: Glassnode
FTX Cash Distribution:
FTX will soon distribute $16 billion in cash to eligible recipients. If recipients choose to reinvest these funds, this distribution could lead to significant capital inflows into the crypto market. Key dates to watch are the trustee vote on August 16 and the court approval deadline on October 7.
Stablecoins:
Stablecoin market capitalization now exceeds $160 billion, up $2 billion in two weeks and surpassing pre-3AC levels. As a reflection of crypto liquidity, stablecoins are a critical factor in long-term price forecasting. With ongoing capital inflows, a sustained bearish outlook becomes difficult to justify.
For the full Coinbase report, see: Q3 2024 – Guide to Crypto Markets
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