As we step into the new year, Binance, the leading global cryptocurrency exchange, has presented its eagerly awaited Monthly Market Insights for January 2024. This comprehensive report delves into the latest trends, noteworthy developments, and key indicators shaping the cryptocurrency landscape.
Whether you’re a seasoned trader, a crypto enthusiast, or someone looking to stay informed about the rapidly evolving market, Binance’s January insights provide valuable information, strategic analyses, and a deeper understanding of the forces driving the digital asset space.
Binance comes intro 2024 prepared
As Binance reports, the crypto market experienced strong growth in December, with a 15% increase in overall market value. The increased anticipation of the first US spot Bitcoin ETF approval in January spurred this spike. The market remained in an uptrend for the majority of the month, with a single noteworthy plunge of nearly 8% on December 11.
On December 10, news of BTC inscriptions being put in the US National Vulnerability Database triggered this decrease. The market began a consolidation phase with a major rising tendency. The broad assumption among market participants is that the SEC’s conclusion will be cautiously upbeat.
Despite multiple last-minute modifications filed by ETF applicants, this optimism remains. According to Binance. the conclusion and market reaction remain to be seen, with a decision due in the first two weeks of January.
The Altcoins season is back
Altcoins are back in play, according to the Binance January forecast. Will the market’s rally last? Every coin in the top ten ended December in the black, with alternative Layer-1 (“L1”) coins like AVAX, SOL, and ADA leading the charge.
These coins saw month-on-month (“MoM”) gains of 84%, 71%, and 60%, respectively. The spike in demand for L1 coins was fueled by Solana’s stellar success in recent months, which shifted the market’s attention to these so-called “Ethereum Killer” currencies.
Airdrop farming, meme coin fever, and sour sentiment towards Ethereum all played a role in this trend. Furthermore, the essential characteristics of these L1 networks have improved. Solana, which was earlier chastised for numerous outages, only had one interruption this year in February, contributing to its increased popularity.
DOT and BNB also performed well, finishing the month with gains of 53% and 39%, respectively. Notably, BNB broke out from its prior rut, appearing as the fourth-best performer among the top ten coins. Binance’s increasing activity around Launchpool events, with three new Launchpools taking place in December, can be ascribed to the growth in BNB’s value.
These Launchpool events enable users to earn fresh token payouts by staking BNB and other stablecoins, hence increasing the demand for BNB.
Both BTC and ETH finished the month with modest gains of 11%. Meanwhile, at the other end of the scale, XRP and TRX are behind their counterparts by only 2%.
DeFi’s market growth
Despite the top 10 chains ending the month in positive territory, Solana saw the biggest growth at 115% MoM.
Jito Finance’s JTO airdrop and BONK memecoin trade boost Solana activity. Base and Avalanche also saw significant gains, with 53.87% and 60.70% increases, respectively. After releasing the SEAM token airdrop, Seamless Protocol, the first native lending protocol on Base, has grown by about 2000% in terms of TVL, becoming the second largest protocol on Base.
Other lending protocols, such as AAVE, JustLend, and Compound, witnessed MoM growth of 13.88%, 7.15 %, and 4.22 %, respectively.
Binance has also summarized notable events and upcoming token unlocks for January 2024.
Inscriptions will also be a trend to watch out for in 2024. Notably, Polygon has had the most activity, with 168.3 million inscriptions to date, followed by Avalanche at 115.4 million and BNB Chain at 95.5 million.
In addition to increasing everyday transactions, inscriptions have contributed to higher fees and lengthier transaction processing times. For example, Avalanche’s transaction expenses increased tenfold as inscriptions briefly accounted for more than 30% of its petrol usage.
Arbitrum and zkSync Era also established new marks in terms of transactions per second (“TPS”), hitting 59.0 and 62.1, respectively. However, both networks experienced intermittent disruptions, turning the inscription trend into an unforeseen stress test for these blockchains.
Finally, the question of whether this trend of EVM-compatible chains can be sustained and used practically remains unanswered, making its long-term viability something to keep an eye on.
NFT projection in 2024
In December, the total NFT market posted favorable increases. Total sales volume surpassed US$1.7 billion, marking the third consecutive month of growth for NFTs and a 77.17% increase year on year. Increased activity on the Bitcoin and Solana networks drove growth, with USD sales volume increasing by 125.63% and 378.90%, respectively. The Ordinals storyline maintains its considerable momentum.
Going forward, competition among blockchains is expected to heat up. Newer NFT-focused blockchains are gaining traction, with the Frame network just announcing its newest fundraising event and the January launch of its L2 mainnet, where creator royalties would be embedded at the network level.
