Nansen’s outlook for the crypto market in 2024

For several weeks now, the crypto industry has been living to the rhythm of the projections announced for 2024. Several platforms have already tried it. This is the case with the VanEck asset manager. Bitget, Bitwise and recently Messari have agreed in the same direction. All these players in the crypto industry generally agree to declare the crypto market in much better health than in 2023. Another platform participated in the same exercise, this time for crypto analysis. His crypto projections are unique in that they provide a table of four (4) configurations that the market could find itself in in 2024. This is what we present to you in this article.

Nansen logo with crypto coins

Scenario 1 of a soft landing in the cryptocurrency market

In his Scenario 1 for the crypto market in 2024, Nansen presents a cautiously optimistic outlook. Bitcoin (BTC) is at the top of this projection, with the outlook focused on a potential increase of 20% to 50%. A planned increase from the current value of the flagship cryptocurrency around $43,700.

Nansen assigns probabilities to this scenario. First a remarkable 50% probability for the first half of 2024. Then a slightly reduced probability of 40% for the second half. This reflects a measured expectation of market stability. The latter shows forecasts of a moderate and controlled growth trajectory over two specified periods.

Additionally, looking at general market sentiment, the combined Nansen probabilities and the broader market suggest an 80% confidence level. Thus, there is a congruence between Nansen’s analysis and general market sentiment that inspires investor confidence. But it also signals a collective belief in the potential for moderate and sustained growth in the value of cryptocurrencies throughout 2024.

This scenario may be reassuring to investors as it is consistent with a measured approach and highlights a controlled appreciation of the BTC price. However, it is imperative that cryptocurrency market participants remain vigilant and adapt to changing market conditions. This is fundamentally dynamic and volatile.

Scenario 2 inflation and sustained growth

In this second configuration of the crypto market in 2024, forecasts are more cautious and potentially bearish. Nansen’s analysis suggests a departure from scenario 1. This, with the Bitcoin (BTC) price outlook ranging from a 10% drop to a whopping 60% drop from the current price.

The probabilities of this scenario are significantly lower, only 20% for the first half of 2024. The projection for the second half is even lower, at 10%. These figures indicate that the probability of inflation and acceleration of growth negatively affecting the crypto market in the mentioned periods is lower.

However, it should be noted that the overall market sentiment as reflected in the probabilities is 0% in this scenario. A stark contrast between Nansen’s analysis and general market sentiment, showing that projections are less in line with prevailing expectations.

Therefore, investors should approach this scenario with great caution. Because the possibility of a slight to severe drop in the price of BTC could pose challenges. The lower probabilities emphasize that the accelerating inflation and growth scenario is less likely to play out.

Scenario 3 of the onset of recession

Projections to 2024 for this scenario present a more nuanced economic backdrop. Indeed, Nansen foresees BTC price movements ranging from a flat trajectory to a slight 20% increase from the current price. A small decline is expected at this setup, reflecting a more moderate market response to economic conditions.

Here, Nansen believes that the market can be expected to experience a relatively mild recession in early 2024. Second, there will be a more pronounced recovery or stability during the second half of the year. The probability is 20% for the first half of 2024 and 40% for the second. On the other hand, it diverges slightly when it comes to general market sentiment. In this configuration, its probability is -20%. This means that some players are expecting a shallow recession, while others are counting on a less favorable outcome.

It is true that investors navigating this scenario may find a more stable and manageable market environment. However, different market probabilities often imply a degree of uncertainty. A situation that highlights the need for careful monitoring and adaptation strategies. As in any economic scenario, external factors can affect results.

Scenario 4 dramatic collapse

This is the scenario Nansen describes“hard landing”. The term itself evokes a decidedly pessimistic outlook that the cryptanalysis platform sees. The latter predicts a substantial decline accompanied by a significant decline in the price outlook of 60% compared to the current valuation. Nansen assigns relatively low probabilities to this scenario. In particular, the company states a 10% probability for both the first and second half of 2024. This means a low perceived probability of a hard landing affecting the crypto market during these two periods.

Furthermore, overall market sentiment is in line with Nansen’s analysis, reflecting a probability of around 0%. This unanimity suggests that Nansen and the market as a whole share some skepticism about the likelihood of a hard landing scenario coming true. However, investors and stakeholders should approach this configuration with caution. Because the sharp drop in BTC price that he is predicting could cause big problems.

Although the probabilities are relatively low, the potential impact of such an event requires careful risk management and strategic planning. Continuous monitoring and adaptability remain critical to nimbly navigating the unpredictable cryptographic landscape.

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A graduate of Sciences Po Toulouse and holder of the blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I made a commitment to raise awareness and inform the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and take advantage of the opportunities it offers. Every day I try to provide an objective analysis of current events, decipher market trends, convey the latest technological innovations and put into perspective the economic and social problems of this ongoing revolution.

DISCLAIMER OF LIABILITY

The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.

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