Analysts at cryptocurrency exchange Coinbase are backing Bitcoin and the overall cryptocurrency market for a significantly positive performance in the second quarter of 2024. This development comes as BTC continues its market recovery, trading above $43,000, up 3.31% over the past week.
Downward pressure on Bitcoin will subside and macro factors will come into play: Analyst
In Coinbase’s weekly report on Friday, analysts at the U.S. exchange noted that market factors that had created downward pressure on Bitcoin are phasing out. This claim is supported by the completion of the liquidation of GBTC by defunct exchange FTX and the bankruptcy recovery of certain cryptocurrency companies, indicating a change in BTC market dynamics.
Analysts also highlighted the stable performance of the Bitcoin spot ETF market last week, with average daily net inflows of $200 million and daily trading volume of $1.35 billion. However, in the coming weeks, Coinbase market experts predict that macroeconomic factors will gain more influence in the cryptocurrency market.
In particular, analysts noted that the U.S. Federal Reserve decided to postpone the review of quantitative tightening (QT) reduction to the next Federal Open Market Committee (FOMC) meeting in March. Based on these developments, they predict that an easing cycle will begin on May 1, which typically includes measures such as lowering interest rates to make borrowing cheaper and stimulate economic activity. They also expect the Federal Reserve to begin pausing its balance sheet contraction by June to further support the U.S. economy.
Interestingly, they believe the Fed could consider implementing an end to balance sheet shrinkage at the same time as cutting interest rates. Based on the “anodyne” policy policymakers implement in an election year, Coinbase analysts predict that the apex U.S. bank will cut interest rates by 100 basis points. This is 25 basis points higher than the Fed’s expectations for future interest rates. One%.
In general, interest rate cuts bode well for the digital asset ecosystem as they allow investors to pay lower borrowing fees and accumulate more funds that can be invested in risky assets such as crypto tokens. Based on several factors listed above, as well as “unusual” factors such as Bitcoin halving, Coinbae’s analysts predict that BTC, along with other tokens, will serve as a favorable portfolio addition in Q2 2024.
Bitcoin Price Overview
As of this writing, Bitcoin is trading at $43,077.76, up 0.20% on the last day. Meanwhile, the asset’s daily trading volume decreased by 15.45% and its value stood at $16.78 billion. With a market capitalization of $844.85 billion, BTC continues to be the world’s largest cryptocurrency.
BTC trading at $43,048 on the daily chart | Source: BTCUSD chart on Tradingview.com
Featured image from CNBC, chart from TradingView
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