After the brunt of 2022’s crypto winter, 2024 started on a rather positive note for the market as most cryptocurrencies moved on to the path of recovery, led by Bitcoin (BTC).
As of today, March 6th, 2024, the cryptocurrency sector is trading with a market capitalization of $2.62 trillion.
Despite Bitcoin hitting its all-time high, crossing the $69,000 mark, the rest of the market seemed to be trading well below their respective all-time highs.
Even though the market is swinging from left to right, it is comfortably trading in a limited range and smooth curves.
While the collapse of Terraform Labs token projects TerraUSD (UST) and Luna (LUNA) and Sam Bankman-Fried’s FTX crypto exchange shook the industry to the ground two years ago, 2024 has given a breath of fresh air and an optimistic outlook that has been positive for major cryptocurrencies like Bitcoin and Ethereum (ETH).
Crypto Market is Successfully Withering Macroeconomic Storms
Nevertheless, the market sentiment has slowly turned from fear to greed and is now neutral. Rising inflation in the US and its impact on liquidity tend to impact the crypto market but instead, it is showing signs of stability.
Historically, the US Federal Reserve’s decision on interest rates over the dollar has had a massive impact on the crypto market.
Back in July, BTC crossed the $31,000 level for the first time in a year only to drop down to $27,000 the very next month after the Fed decided to keep borrowing interest rates on USD unchanged and on a high.
However, since October 2023, Bitcoin and the larger cryptocurrency market have shown immense signs of recovery, with the leading crypto asset trading then at the $34,500 range.
At present, the cumulative trading volume of the crypto market stands at $323.65 billion. If we were to take into account the performances of the first and second largest cryptocurrencies by market cap – BTC and ETH, then they are still dominating the market and showing signs of recovery.
Be it the Russia-Ukraine conflict, the Terra-Luna crash, the FTX collapse, or global crypto tax regulations, the market has successfully withered the roughest storms the macroeconomy could have caused.
$1.19 Billion in Crypto Liquidated Following Bitcoin’s Surge To All-Time High
In the hours following Bitcoin’s rise to the peak, over $1.1 billion in cryptocurrencies had been liquidated by investors. Most of these liquidations were by those who were holding their tokens for over two years, waiting for them to return profit.
A grand total of 318,221 tokens were liquidated in less than 24 hours after BTC crossed the coveted $69,000 mark.
The demand for Bitcoin through ETFs has also resulted in a supply shock. Combine this with the upcoming halving event, which reduces BTC’s supply by half, the demand is guaranteed to rise much further while supply continues to decline.
For this reason, investors are accumulating as many Bitcoins as they can before the block reward subsidy for miners is cut in half come April.
At the time of writing, Bitcoin is trading at $66,456 – down 0.3% in the last 24 hours. Meanwhile, Ethereum is trading at $3,846 – up 3.4% during the same period.
Conclusion
2024 has been a fresh start to the world of cryptocurrencies, where it’s showing signs of recovery. The incredible demand for Bitcoin initiated by the spot Bitcoin exchange-traded funds (ETFs) from major Wall Street firms and the upcoming block reward halving on the Bitcoin network has played a major part in propelling BTC prices first to monthly, then yearly, and finally all-time highs.
There is no doubt that the market has successfully stood up to the test of time and responded to the uncertainties of the global financial and geopolitical situations with such vigor that it is still standing tall and strong.
