Coinbase Crypto Outlook for Q3 2024: Upward Trend Clear, Crypto Relevance Declining

Compiled by: Vernacular Blockchain

Coinbase has just released its Cryptocurrency Outlook for the third quarter of 2024. The report is so informative that @DistilledCrypto read all 60 pages and summarized the 10 main points you need to know below.

1. MVRV and Market Trend

When MVRV is higher than its 365-day average, it indicates that the market is in a strong upward trend.

A pullback with support in MVRV is usually a buying opportunity.

Currently, MVRV has bounced off support, indicating that the uptrend remains.

2. Bitcoin’s ROI from cycle lows

Bitcoin has completed four market cycles, each of which has bull and bear phases.

In this cycle, Bitcoin is up about 400% since the November 2022 lows.

This cycle is similar to the 2018 to 2022 cycle when Bitcoin rose 2000% from its lows.

3. Minor corrections

Bitcoin bull market cycles are usually accompanied by exponential growth and large corrections.

This cycle is different, showing smaller corrections: eight corrections between 5%-20%, two between 20%-30%, and no corrections exceeding 30%.

4. Cryptocurrency correlations dropped

In the second quarter, the correlations of crypto assets dropped: Ethereum’s correlation was 0.7, and some altcoins were below 0.5.

This decoupling phenomenon shows that the market has a deeper understanding of Token fundamentals.

Relevance is expected to decline further as regulatory transparency increases and institutional adoption increases.

5. Volatility perception and reality

Perception: For many investors, the volatility of digital assets is too high.

Reality: Cryptocurrency markets are as volatile as some of the mainstream tech stocks with massive market caps.

6. Impact of spot ETFs

Spot ETFs bring significant new demand for Bitcoin, while new Bitcoin supply is still limited to miner rewards.

Since spot ETFs began trading, demand for ETFs has significantly exceeded Bitcoin issuance.

7. Ethereum Market Cycle

Ethereum has completed two complete market cycles.

This cycle started in 2022, and since November 2022, Ethereum has risen by more than 240%.

This cycle is similar to the period from 2018 to 2022, when Ethereum rose 6000% from its lows.

8. Ethereum’s Total Value Locked (TVL)

TVL tracks the value of altcoins and stablecoins in smart contracts and decentralized applications (dApps). It reflects financial activity and liquidity.

In Q2, TVL grew by 9%, indicating increased activity on the Ethereum blockchain.

9. FTX Cash Distribution

FTX will make a cash distribution, which may result in large cryptocurrency inflows if the recipient reinvests it.

Key dates: August 16 (Trustee vote) and October 7 (Court approval deadline).

10. Stablecoins

The market capitalization of stablecoins is $162.5 billion, an increase of $2 billion in two weeks, surpassing pre-3AC levels.

As a reflection of cryptocurrency liquidity, stablecoins are an important indicator of long-term price prediction.

With capital inflows, it is difficult to support the bearish market outlook.

Finally, thanks to @CoinbaseInsto and @glassnode for the insights! This article is purely educational and does not constitute investment advice.

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