Week by numbers
In the last week, the crypto market has shown an upward trend. The price of the largest cryptocurrency, Bitcoin, rose by about four percent, while the price of the second-largest cryptocurrency, Ether, increased by about seven percent. The total market value of other cryptocurrencies (excluding major stablecoins) rose about four percent, similar to Bitcoin.
As Bitcoin's price developed in line with the broader market, there were no significant changes in Bitcoin dominance. However, due to Ether's relatively stronger price performance compared to the rest of the market, the ETH/BTC ratio, which had been in a long decline, increased by about three percent.
Following Donald Trump’s election victory and Bitcoin’s all-time high (detailed below), there were some notable price spikes in the market. Among the tokens on the Kvarn X trading platform, Raydium (RAY, +47%), Ethena (ENA, +41%), and Lido DAO's LDO token (+24%) saw the biggest weekly gains. Conversely, meme coins WIF (-10%) and POPCAT (-8%), as well as Immutable X (IMX, -11%), were among the week’s biggest losers in an otherwise bullish market.
Market Commentary
The most significant event in the crypto market over the past week was, of course, Bitcoin reaching a new all-time high (ATH).
Bitcoin's price started a steep ascent in the early hours of Wednesday as Donald Trump’s victory in the U.S. presidential election began to look certain. The rally gained further momentum on Wednesday as U.S. stock markets opened, reaching its highest level so far on Wednesday evening at around $76,500.
Bitcoin’s new ATH is naturally a significant historical milestone for the entire crypto market. Now that it’s been achieved, what should crypto investors watch for next?
The future development of the crypto market can be thought of through case studies of previous ATHs.
Following the 2020 ATH, a dramatic, year-long "bull run" occurred, during which Bitcoin’s price roughly tripled post-ATH, and an "alt season" saw many altcoin price surge thousands of percents.
After the spring 2024 ATH, Bitcoin’s price moved only about seven percent above the previous high and stayed there for only about a week.
Which scenario should crypto investors expect after this new ATH?
Our recommendation is that as a next step, it may be useful to focus on the price development of strong altcoins to analyze the market.
Despite the recent strong market movement, it has been very Bitcoin-heavy. While Bitcoin has just reached a new ATH, most altcoins are still far from their all-time highs. In this regard, the current situation still resembles that of spring 2024, when Bitcoin set a new ATH, but most of the larger cryptocurrencies did not.
If we’re on the verge of a new powerful bull run, we would likely see some strong gains from altcoins next. Many larger tokens’ ATHs are from 2021, and waiting for them to surpass those levels might be setting the bar unnecessarily high. As a first step, it may be worth watching to see if major altcoins can surpass their spring 2024 highs.
Let's take Solana's SOL token as an example. SOL has been relatively strong within the crypto market in 2024, as shown by the consistent increase in SOL dominance (SOL’s share of the total crypto market value). We thus have grounds to assume that if the crypto market overall keeps developing strongly, this will also be reflected in SOL's price.
In the chart below, we can see that while Bitcoin has already exceeded its spring 2024 high, SOL’s price is still about 10% below its own spring 2024 peak.
Currently, SOL is around the $190 level, where it topped out at local highs of May and July. The first promising sign would be if it surpasses its July local high (about $194). The next milestone would be the March local high of around $210. Breaking above this level would be a strong indicator of the continuation of the bull market.
One might ask, why focus on individual tokens instead of the overall crypto market?
Instead of Solana, we could indeed look at some of the aggregators we often use, such as the TradingView tickers TOTAL2-USDT-USDC (total market value of all cryptocurrencies excluding Bitcoin and major stablecoins USDT and USDC) or OTHERS (the combined market value of cryptocurrencies outside the top 10).
In the chart below, we can see that the first of these is currently about 25% and the latter 35% below its spring high.
Aggregates are often an excellent way to view the crypto market. However, in this situation, their usefulness might be limited because their total values also include poorly performing tokens that are unlikely to reach their spring highs anytime soon. A clear example of this is the second-largest cryptocurrency, Ether, whose price performance has been notably weak this year. Smaller tokens in the OTHERS category also include short-lived tokens that will never reach their spring highs.
Therefore, we believe that the best indication of the continuation of the bull market, in terms of speed and reliability, would be if the strongest tokens in the crypto market were to start reaching their new 2024 highs.
The more tokens that reach these highs, especially those with large market caps, the stronger this signal would be. Among individual tokens, we believe SOL might be the best one to watch, as it has a high market cap and has developed strongly in 2024.
With Bitcoin's new ATH, we’re in an especially exciting period in the crypto market. We will continue to monitor the situation and will return with more analysis in the next Kvarn Pulse newsletter, so stay tuned!
Kvarn X's New Fee Levels: Transparent and Competitive Pricing
At Kvarn X, we have updated our fee levels to offer even more competitive pricing for all our customers. We want trading costs to stay low regardless of your investment size.
Our new fee model allows you to benefit from lower costs with higher trading volumes and aligns Kvarn X's pricing competitively with international crypto exchanges. Our fees are as low as 0.10% of your trading volume!
Read more about our updated fee levels here:
https://www.kvarnx.com/en/content/kvarn-xs-new-fee-tiers-transparent-and-competitive-pricing
Ideas for Building a Crypto Portfolio?
If you're wondering how to build a crypto portfolio or how to get started with crypto investing, we offer various theme-based examples in this section as ideas for constructing your portfolio. Please note that nothing in this newsletter constitutes investment advice or should be interpreted as an encouragement to make investment decisions.
Theme Idea: AI Tokens
Artificial intelligence (AI) is one of today’s biggest megatrends. AI tokens have been one of the hottest themes of 2024 in the crypto market.
Crypto projects that combine AI and blockchain technology are particularly interesting for two reasons:
1. Many aim to solve one of AI's biggest issues, data centralization. Projects focused on decentralizing data and/or computing power aim to provide a fairer and thus safer foundation for AI development.
2. These projects’ tokens allow small investors to benefit directly from AI's value creation, potentially more so than publicly traded stocks.
An example of an AI-themed crypto portfolio available on Kvarn X might include:
- Artificial Superintelligence Alliance (FET)
- Render (RENDER)
- Akash Network (AKT)
Stay tuned for more portfolio-building theme ideas in our upcoming Pulse newsletters!
The material contained in the Kvarn Pulse is produced solely for the purpose of marketing communication. Any information conveyed through Kvarn Pulse should not be construed as an offer or an invitation to make any purchase or sale decisions, or as an encouragement to make investment decisions about any investment object. Copying or borrowing the content of the newsletter without Kvarn's express permission is prohibited. The information presented in the newsletter pertains to the situation prevailing at the time of writing, and the information may or may not have changed. Kvarn Capital Oy does not guarantee the accuracy or completeness of the information contained in the newsletter or referred to in the newsletter.