Cryptocurrency Market Annual Review: Navigating the Path to Altcoin Season Amidst Pessimism and Optimism
Most of the stories in 2024 are about sluggish market sentiment and internal strife.Original Title: "Markets Year Ahead 2025"
Author: Delphi Digital
Compiled by: Felix, PANews
In 2024, the cryptocurrency market is at a crossroads: the strong rise of Bitcoin starkly contrasts with the overall market's weakness, and only a regulatory shift towards the end of the year brightens the outlook.
The crypto narrative is being recalibrated, and 2025 will usher in a brand new beginning. This article aims to briefly review this year's market situation.
Many crypto enthusiasts believe that with the launch of spot ETF products, the crypto market will rebound to historical highs. However, this is not entirely the case, at least not as many expected.
In the first quarter of this year, Bitcoin surged over 50% with the launch of ETFs, reaching $73,000. Billions of dollars flowed directly in, and the market no longer had any concerns about institutional demand. For about seven months, Bitcoin primarily fluctuated between $60,000 and $70,000.
Unfortunately, most tokens have been struggling, except for a few standout performers. The initial "failure" (or lack of liquidity) of spot ETH trading launched mid-year exacerbated these difficulties. Much of the story in 2024 revolves around sluggish market sentiment and infighting.
However, after the presidential election in November, the crypto industry finally saw a glimmer of hope. The changes in market sentiment and risk appetite over the past few weeks reflect this.
Cyclical Strategy is on Track
At the end of 2022, Delphi Digital outlined the reasons for the bear market bottoming out and expressed confidence in the upcoming bull market cycle over 15 months ago. In last year's report, it predicted that Bitcoin would break new highs in the fourth quarter of 2024.
On the macro front, reality has aligned with expectations. So far, Bitcoin halving has not been the main catalyst for the crypto market cycle, but rather the liquidity cycle.
At the end of last year, Delphi Digital listed favorable conditions for Bitcoin to perform strongly in the first quarter, one of which was a surge in global liquidity. It also warned that the risk of a market pullback was higher from the end of the first quarter of 2024 to the beginning of the second quarter due to signs of weakening liquidity momentum.
So far this year, Bitcoin has risen over 130%, achieved without much support from the Federal Reserve. In fact, liquidity from the Fed has been steadily declining over the past 9-10 months.
Return of Optimism
2024 has been a strange year for the crypto market. On one hand, most mainstream currencies have returned to historical highs, while the broader altcoin market has also shown signs of recovery.
However, the crypto community (such as on Twitter) has been embroiled in infighting for most of this year. The pessimistic sentiment of 2024 sharply contrasts with the positive price trends.
The reasons for the poor market sentiment primarily stem from Bitcoin's dominance. Bitcoin has surged 130% year-to-date, reaching a three-year high in dominance.
The second factor is dispersion: some tokens have seen price increases, some have risen slightly, but most tokens have either declined or remained stagnant.
The classic "path to altcoin season" that many have come to expect has failed to materialize.
Supply and Demand Imbalance
As mentioned in many reports over the past year, the crypto market faces a significant supply and demand imbalance. In short, the demand for cryptocurrencies has not kept pace with the overall supply of cryptocurrencies. The reasons are as follows.
Too Many Tokens
Aggregators have launched over 10,000 tokens, compared to about 1,500 in 2017, a tenfold increase.
Applications like pump.fun have made token creation simple: since January 2024, over 4 million tokens have been issued, with over 50 million tokens entering Solana's Raydium.
Memecoin Continuation
2024 has given rise to a Major-Memecoin barbell investment portfolio. 
Will these market dynamics remain unchanged, and will memecoins dominate for another year? Or will the crypto market return to fundamentals?
The reality is more complex, influenced by speculative enthusiasm and ever-changing market trends.
Solana Accelerates Development
In the last cycle, SOL rose from $1 to $260 within a year. Although the ecosystem is still in its infancy, it has attracted teams like Jito, Drift, and Helium. All these teams will become foundational parts of the network.
Solana ultimately rose too high. Following the FTX collapse, the bear market, and doubts about chain stability, SOL fell by 96%.
On Christmas 2022, Bonk airdropped 50% of its supply to the Solana community. SOL was trading at $11, with a bleak outlook. Days later, SOL dropped to a low of $8, ending a brutal year.
Solana was reborn in 2023. The core team focused on serving a loyal user base with Drift Protocol, Jito, and Tensor Foundation, steadily innovating to drive recovery.
As we enter 2025, several questions remain:
- Has the SOL rally ended?
- Will memecoins disappear?
- Can Base capture market share?
- Will Ethereum make a comeback?
While these concerns are valid, they miss the point. Solana's performance in 2025 will be based on two core beliefs:
- Solana's data indicates that SOL/ETH is being repriced. Lower-level activity shows strong fundamentals, suggesting greater upside potential compared to ETH.
- Leadership and culture: Solana's relentless innovation and thriving ecosystem give it a unique advantage in the cryptocurrency space.
2024 can be seen as a turning point for the industry, but no one knows exactly how 2025 will unfold.
