Summary
Coinbase analysts believe that downside pressures on bitcoin and the broader cryptocurrency market are starting to fade, which could create a more supportive trading environment. One factor contributing to this is the completion of FTX’s bankruptcy estate selling its significant GBTC holdings. Additionally, there have been consistent net inflows into U.S. spot bitcoin ETFs, indicating investor interest. The report also highlights the possibility of rate cuts in May by the U.S. Federal Reserve, which could coincide with the bitcoin halving and potentially boost the market in Q2 2024.
Key Points
1. Downside pressures on bitcoin and the broader cryptocurrency market are starting to become exhausted, leading to a more supportive trading environment, according to Coinbase analysts.
2. The completion of FTX’s bankruptcy estate selling its substantial GBTC holdings has significantly depleted much of the downward pressure on bitcoin.
3. Net inflows into U.S. spot bitcoin ETFs have averaged over $200 million a day in the past week, indicating a more supportive trading environment, and suggesting that macro factors may become more relevant for the digital asset class.
4. The U.S. Federal Reserve’s recent rate decision press conference suggests a postponement of the central bank’s quantitative tightening program, with the monetary easing cycle likely to start on May 1. This, along with the possibility of a rate cut coinciding with the bitcoin halving, could potentially support both bitcoin and other tokens in Q2, 2024.