Coinbase’s Analysis of Bitcoin’s Future
Cryptocurrency exchange Coinbase has released a report titled “Weekly: Constructive Outlook” where its analysts provide their insights on the future trajectory of Bitcoin (BTC) and the broader crypto market. According to Coinbase’s report, many technical factors that have been affecting Bitcoin and the crypto market are starting to weaken, as evidenced by liquidations at FTX and the emergence of bankrupt entities. The report also mentions the net inflows into U.S. spot Bitcoin ETFs and highlights the expected increase in the relevance of macro factors for digital assets in the coming weeks, which could support their performance.
U.S. Economic Outlook
The Coinbase report also includes an analysis of the U.S. economic outlook. It suggests that the probability of a soft landing has increased, as the country’s economy is making minimal tradeoffs between activity and inflation. The analysts anticipate a disinflationary trend to persist and predict that the Federal Reserve will cut interest rates by 100 basis points this year. This projection differs from the dot plot and the Fed funds futures, which suggest lower rate cuts. The report concludes that rate cuts in the U.S. are expected to begin in May, with the tapering of quantitative tightening, coinciding with events like the Bitcoin halving, which could create a positive environment for the entire asset class.
Hot Take: Crypto Market Outlook
Coinbase’s analysis suggests that the technical pressures on Bitcoin and the crypto market are easing, signaling a potential upswing in performance. Additionally, the report highlights the increasing relevance of macro factors and the potential impact of U.S. rate cuts on the digital asset class. This optimistic outlook aligns with the anticipation of a soft landing in the U.S. economy and the expectation of a disinflationary trend. With these factors coming into play, the Coinbase report indicates a positive setup for digital assets moving forward.
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