The crypto market appears primed for a bull run in 2024, with leading exchange Bitfinex predicting “an extended visit to ‘extreme greed’ sentiment” over the coming year. In its latest market analysis, Bitfinex cites improving fundamentals and macroeconomic tailwinds that could send Bitcoin to new all-time highs. A sentiment that will please many eagerly waiting investors.
After the unexpected near-continuous positive run in 2023, market players are hoping for a similarly upward trajectory in 2024.
“Looking at range of different metrics and sentiment indicators and their performance at similar points in the cycle is constructive,” notes the report. Specifically, Bitfinex points to the crypto fear and greed index, which currently shows investor sentiment transitioning “from a state of extreme fear to greed” – a pattern typically seen at the start of bull markets.
The analysis also highlights Bitcoin’s market dominance climbing back above 50% for the first time since April 2021. Bitfinex attributes this to optimism around the flurry of spot Bitcoin ETF applications in the US, which have “bolstered the credentials of crypto as an emerging asset class.” Institutional investment flows are expected to continue favoring Bitcoin (BTC) over higher-risk assets.
At the same time, Bitfinex cautions that “we are highly likely to see pull backs” in 2024, based on historical boom-and-bust cycles. The report forecasts total crypto market capitalization oscillating between $1.6 trillion and $3.2 trillion over the next year or so. A huge potential swing for a market currently sitting at approximately $1.7 trillion .
Examining Bitcoin’s current price against its “realized price” – an estimate of the average purchase cost of all circulating BTC – Bitfinex notes investor valuations still have ample room to run. “This is another reason why we expected a pullback” from Bitcoin’s recent $44,000-$45,000 test, explains Bitfinex. At the time of writing, Bitcoin currently sits at approximately $43,700. More ranging is likely before a decisive move upwards.
The mining sector also offers clues on the market’s next moves. With the 2024 Bitcoin halving expected to reduce block rewards by 50%, monitoring miner behavior is key. So far miner indicators like the Puell Multiple signal healthy market conditions and limited selling pressure ahead of the halving.
On the macroeconomic front, Bitfinex remains upbeat. Inflation is projected to decline through 2024, aided by supply chain improvements and slowing wage growth. GDP forecasts show resilience, making a US recession unlikely despite rising interest rates.
Bitfinex also sees greater Bitcoin adoption unfolding over the next year. Initiatives like El Salvador’s Bitcoin bonds and regulatory moves in Argentina hint at growing exposure among everyday users. Crypto ownership could approach 900 million globally in 2024, estimates Bitfinex.
While the report warns pullbacks are probable, its generally optimistic tone suggests conviction in crypto’s upward trajectory. A path Bitfinex, the world’s 9th most popular crypto exchange by trade volume, hopes comes to fruition. If only for its trading fees.