Price volatility, significant fund transfers, and expectations for the holiday season have prompted many investors to rethink their trading strategies, reports a correspondent from the Kapital.kz business information center.
The transfer of $49.4 million in Bitcoin from Mt.Gox triggered a wave of sell-offs on December 23, causing the value of the leading cryptocurrency to drop to $92,500. QCP Capital stated that the long-awaited Christmas rally is unlikely to happen. Experts noted a continued outflow of capital from ETFs and a decline in liquidity. They believe that MicroStrategy's purchase of 5,262 BTC for a "relatively modest" ~$561 million might indicate a decreased willingness from the company to take risks at current price levels. Analysts suggested a likelihood of increased volatility during the New Year holidays, as the expiration of options on December 27 coincided with a rise in gamma. Cointelegraph also recorded a low probability of witnessing the so-called Santa Claus rally. Nevertheless, some traders remain optimistic, considering the possibility of a repeat of the scenarios from 2016 and 2020. According to CoinGecko, from 2014 to 2023, the digital asset market demonstrated growth in eight out of ten cases, ranging from 0.7% to 11.8% in the weekly interval from December 27 to January 2. The current decline of 2.1% since the beginning of the month is close to the median figure for December (-2.99%) but remains below its average level (4.8%), according to Coinglass statistics.
Ethereum has also remained in the spotlight, continuing to hold the second position in terms of market capitalization. Analysts estimate that 2024 will not be a standout year for Ethereum; however, significant changes may occur in 2025. Despite some market corrections, Ethereum has shown several bullish signals, suggesting that investors maintain confidence in this asset. This was reported by CryptoQuant analysts. Firstly, they explained that the leverage ratio in Ethereum derivatives is at high levels, reflecting a persistent risk appetite among traders. Secondly, funding rates remain positive but have not reached extreme levels. "This dynamic indicates that the price still has room for healthy increases without the threat of mass liquidations," the experts concluded. The third factor is the Korea Premium index, which shows a significant difference between quotes on South Korean exchanges and foreign exchanges, which has turned positive again. According to specialists, this indicates a growing interest in Ethereum in the Korean market and positively impacts the overall atmosphere surrounding the asset. Additionally, analysts noted the continuous growth of aggregate investments in Ethereum funds, despite price corrections. They stated that this trend indicates confidence from both institutional and retail players. "The cumulative influence of all these factors creates a stable bullish outlook for Ethereum, as market participants seem ready to hold and increase their capital in this asset," emphasized CryptoQuant.
Ethereum's potential to outperform Bitcoin in January should not come as a surprise, and such dynamics may serve as a catalyst for an altcoin rally within the Ethereum ecosystem. This conclusion was reached by analyst and MN Trading founder Michaël van de Poppe. He stated that the ETH/BTC pair has a high chance of surpassing the 0.4 level, which was last recorded on December 8. Currently, this figure stands at 0.0356. In his opinion, possible outflows from Bitcoin and inflows into Ethereum could help realize this scenario. The consolidation of the leading cryptocurrency's quotes, in turn, will act as a catalyst for demand for tokens associated with the Ethereum ecosystem. On December 23, $130.8 million flowed into spot ETH ETFs after two days of outflows, and from December 18 to 27, investors invested a total of $2.45 billion in these funds. Meanwhile, outflows from spot BTC ETFs continued for the third consecutive day, totaling $226.6 million in the last 24 hours and $1.18 billion over the entire period.
However, even with positive signals surrounding Ethereum, experts remind that the year is not yet over, and adverse factors could push the entire cryptocurrency market to lower levels. André Dragosh, head of Bitwise's research division in Europe, mentioned in an interview with CoinDesk the possibility of further declines in Bitcoin's price if investors' risk appetite worsens. According to André Dragosh, the current downward correction in Bitcoin began on December 18 when the U.S. Federal Reserve announced a reduction in the key rate range by 25 basis points to 4.25–4.5% per annum. At the same time, the threat of negative macroeconomic factors pushed market participants toward safer options, such as 10-year U.S. Treasury bonds, which heightened caution towards volatile assets like BTC. "The Fed finds itself in a difficult situation, given that three consecutive rate cuts since September have not led to a noticeable improvement in financial conditions, while inflation, according to recent data, has accelerated to new highs," the expert explained. He added that fearing a repeat of the double peak inflation seen in the 1970s and 1980s, the regulator is no longer inclined to take drastic measures to ease monetary policy. As a result, such a cautious approach may prove insufficient to prevent further deterioration in conditions. "Prepare for even more pressure in the coming weeks," André Dragosh stated. He emphasized that the correction could present favorable buying opportunities for Bitcoin "on the dip." The key long-term growth factor, in his view, lies in the limited supply of the leading cryptocurrency, allowing it to retain potential in the future. Bitwise's forecast for 2025 set a target level of $200,000 for Bitcoin.
Another notable feature of 2024 that has garnered widespread attention is the explosive interest in meme tokens. CoinGecko revealed that meme coins accounted for over 30% of the total interest among crypto investors, becoming the most popular narrative. "Funny coins," as they are sometimes called, attracted 14.36% of interest, which is an increase of 6.04% compared to last year. Related areas include memes on Solana (7.65%), memes on Base (2.13%), AI memes (1.49%), and "kitties" (1.19%). The artificial intelligence sector ranked second with 15.67%. Among related topics, only AI agents (1.17%) made it into the top 20. Tokenized real-world assets (RWA) also gained attention, capturing 8.64% and securing the third position. In this context, the popularity of GameFi dropped from 10.49% to 3.72%, while interest in DePIN rose to the same 8.64%. Among blockchain ecosystems, Solana reported a cumulative result of 14.3%, a significant portion of which is linked to meme tokens on this network. Similarly, Base's overall figure reached 4.87%.
Analyzing the forthcoming prospects, experts and industry insiders have highlighted key trends that could shape the development of the crypto industry in 2025. Forbes contributor and NovaBlock Capital partner Lior Shimron listed seven main trends. He emphasized that 2024 has been a pivotal year for Bitcoin and the digital asset sector as a whole. As evidence, he cited the launch of spot ETFs based on the two largest cryptocurrencies in the U.S., the establishment of new Bitcoin highs above the $100,000 mark, and Donald Trump's victory, which included support for the first cryptocurrency in his political program. The expert stated that all these events will continue to unfold. Lior Shimron explained that one of the G7 or BRICS countries is likely to create its own Bitcoin reserve soon. The initiative from Donald Trump's team regarding the formation of a Strategic Bitcoin Reserve (SBR) has already sparked numerous hypotheses and debates. Adding cryptocurrency to the U.S. Treasury would require significant political backing, but the very proposal has triggered an "SBR race" among states. "The limited supply of Bitcoin and its growing status as a digital store of value are driving governments to act swiftly," Lior Shimron stated. He noted that calls for the creation of crypto reserves have already been heard in the State Duma of the Russian Federation and the European Parliament.
The second important point is the doubling of the total capitalization of stablecoins, which could exceed $400 billion by 2025. Lior Shimron highlighted that "stablecoins" have already become one of the most sought-after segments in the market, with a total capitalization surpassing $200 billion, dominated by USDT and USDC. According to the expert, regulators in the U.S. are prepared to expedite the development of a legal framework for stablecoins, recognizing their critical role in maintaining the global influence of the dollar. Next, Lior Shimron noted the growth of DeFi based on Bitcoin. He emphasized that projects like Stacks, BOB, Babylon, and CoreDAO continue to expand the potential of the leading cryptocurrency through L2 solutions that enable the creation of decentralized applications on Bitcoin. A significant step was the Nakamoto upgrade from Stacks, which provided holders of the leading cryptocurrency the opportunity to engage in lending, staking, and other DeFi areas without losing their connection to Bitcoin. "Looking ahead, Bitcoin-DeFi is expected to experience rapid growth: the total TVL in L2 solutions will likely far exceed the current $24 billion," the expert summarized. The segment of exchange-traded funds based on Bitcoin