Best Cryptocurrency Market Review 2024: Bitcoin Corrects as Altcoins Gain Momentum

Entering a new phase in 2024, the crypto market shows complex dynamics with bitcoin experiencing price pressure amid increasingly defensive risk sentiment. Meanwhile, traditional assets like gold hit record highs, and alternative sectors are beginning to show signs of revival. This development reflects a strategic shift in global capital allocation driven by geopolitical uncertainties.

Market Sentiment Turns to Defensive Assets

Pressure on bitcoin and ethereum reflects significant changes in market sentiment. Bitcoin weakened to $88,090 with a 1.04% decline in the last 24 hours, while ethereum corrected to $2,950 with a 1.40% loss. This movement aligns with weakness seen in Nasdaq 100 and S&P 500 futures contracts, which declined 0.4% and 0.25%, respectively.

Gold and silver, on the other hand, reached their highest levels in history this week. This phenomenon is no coincidence—investors massively shift to traditional hedges when facing macroeconomic scenarios full of uncertainty. The first trilateral talks between Ukraine, Russia, and the United States on Friday created significant psychological pressure, with most analysts expressing pessimism about the prospects of resolving the conflict.

Altcoins Seize Opportunities Amid Consolidation

While bitcoin and ethereum face pressure, the alternative sector is beginning to show promising breakout potential. LayerZero (ZRO), a cross-chain interoperability protocol gaining popularity, experienced a 3.62% correction in the last 24 hours—yet, this token continues to attract attention due to expectations of major updates scheduled for early February.

Movements in the alternative sector also include Tron (TRX), which gained 0.88%, and Dash (DASH), which corrected by 8.06%. This dynamic indicates that liquidity is starting to move into assets with specific value propositions rather than just following bitcoin and ethereum movements.

The altcoin season index rose to 29 from 24 weeks earlier, signaling traders’ initiative to capitalize on the relative calm in volatility for bargain hunting. However, market depth for certain assets remains limited. The Open Network (TON), for example, has a market depth of 2%, valued between $580,000 and $700,000—meaning only orders within that range are needed to move an asset worth $3.7 billion by 2%.

Derivative Pressure Signals Caution Among Traders

Activity in the derivatives market reveals a concerning trend for bulls. Over $200 million in crypto futures bets were liquidated in the last 24 hours, with long (bullish) positions comprising the majority of the total. This event continues the pattern from last week when price declines surprised optimists.

The 30-day implied volatility index for Bitcoin (BVIV) fell back to 40%, reversing a brief spike on Tuesday that reached 44%. This pattern indicates persistent investor interest in selling volatility through strategies like covered calls, a defensive tactic that generates yield while capping upside potential.

Ethereum shows a unique dynamic with a slight increase in open interest (OI) in futures contracts, while major tokens like Bitcoin, XRP, and Solana experience outflows. On Deribit, ethereum put options with short-term tenors have higher premiums than Bitcoin—an indication that traders are more pessimistic about ethereum’s near-term prospects.

The cumulative delta volume indicator adjusted for open interest shows net buying in Tron, ZEC, and Bitcoin Cash, while Bitcoin itself experiences net selling. Block flow data indicates tendencies toward Bitcoin straddles (bets on high volatility) and Ethereum put spreads.

Diverse Token Sectors Focused on Fundamentals

The CoinDesk 20 Index (CD20), dominated by Bitcoin, declined 0.6% since midnight UTC. However, other categories such as memecoin, DeFi, and metaverse all posted gains. The metaverse sector, in particular, continues to show momentum with the CoinDesk Metaverse Index (MTVS) up 50% since January 1.

Axie Infinity (AXS) and Sandbox (SAND) remain key drivers in the metaverse gaming sector, although AXS has lost 56.92% over the past year. The most interesting story is the resurgence of Pudgy Penguins as one of the strongest NFT-native brands in this cycle.

Pudgy Penguins’ strategy shows an evolution from speculation on “digital luxury goods” toward a multi-vertical consumer IP platform. Their approach is to acquire users through mainstream channels first—toys, retail partnerships, viral media—before onboarding them into Web3 via games, NFTs, and the PENGU token. Their ecosystem now includes physical-digital products (retail sales exceeding $13 million and over 1 million units sold), interactive games and experiences (Pudgy Party reaching 500,000 downloads in two weeks), and broad token distribution (airdrops to over 6 million wallets).

Although the market currently values Pudgy Penguins with a premium relative to traditional IP peers, sustained success depends on execution in retail expansion, gaming adoption, and increased token utility.

Macro Analysis: Why Bitcoin Lags Behind Dollar Recovery

An interesting anomaly is that bitcoin has not shown gains alongside the weakening US dollar—an development that should benefit alternative assets. JPMorgan strategists offer key insights: dollar weakness is driven by short-term flows and sentiment alone, not by fundamental changes in economic growth or monetary policy expectations.

JPMorgan projects that the US dollar will stabilize as the domestic economy strengthens. Since the market does not view the current dollar decline as a lasting macro shift, bitcoin is traded more like a risk asset sensitive to overall liquidity rather than a reliable dollar hedge.

As a result, gold and emerging market assets become the main recipients of dollar diversification, not bitcoin. This dynamic indicates that for bitcoin to gain positive momentum, more fundamental triggers are needed—either from blockchain ecosystem fundamentals or from structurally changing macroeconomic expectations.