Analysts Predict Positive Performance for Bitcoin and Crypto Market in Q2 2024
According to analysts at cryptocurrency exchange Coinbase, Bitcoin and the overall crypto market are expected to have a strong performance in Q2 2024. This comes as Bitcoin continues its market recovery, experiencing a 3.31% gain in the past week and trading above $43,000.
Downward Pressure on Bitcoin Subsides, Macro Factors to Influence Market
In their recent weekly report, Coinbase analysts mentioned that the market factors causing downward pressure on Bitcoin are diminishing. This is supported by the completion of GBTC’s liquidations by defunct exchange FTX and the recovery of certain crypto entities from bankruptcy, indicating a shift in BTC market dynamics.
The analysts also pointed out the stable performance of the Bitcoin spot ETF market, with average daily net inflows of $200 million and a daily trading volume of $1.35 billion in the last week. However, they anticipate macroeconomic factors to have a greater impact on the crypto market in the coming weeks.
US Federal Reserve’s Decision and Easing Cycle
The analysts referred to the US Federal Reserve’s decision to postpone discussions on scaling back quantitative tightening (QT) until March’s Federal Open Market Committee (FOMC) meeting. They predict that the easing cycle will begin on May 1, which typically involves measures like lowering interest rates to stimulate economic activity.
Additionally, they expect the Fed to halt balance sheet reductions by June to further support the US economy. The analysts believe that rate cuts and ending balance sheet reduction could coincide. They predict a potential 100 basis points (bps) interest rate cut by the US apex bank, which is higher than the Fed’s expectation for future rates.
Positive Impact of Interest Rate Reduction on Digital Assets
A reduction in interest rates is seen as a positive sign for the digital asset ecosystem, as it allows investors to borrow at lower fees and invest more funds in risk assets like cryptocurrencies. Taking into account various factors, including the Bitcoin halving, Coinbase analysts predict that BTC and other tokens will be favorable additions to portfolios in Q2 2024.
Bitcoin Price Overview
Currently, Bitcoin is trading at $43,077.76 with a 0.20% gain in the last 24 hours. The daily trading volume has decreased by 15.45% and is valued at $16.78 billion. With a market cap of $844.85 billion, BTC remains the largest cryptocurrency globally.
Hot Take: Analysts Expect Positive Outlook for Bitcoin and Crypto Market in Q2 2024
Based on Coinbase analysts’ assessment of decreasing downward pressure on Bitcoin, stable performance of the Bitcoin spot ETF market, and upcoming macroeconomic factors such as interest rate cuts by the US Federal Reserve, a positive outlook is predicted for Bitcoin and the crypto market in Q2 2024. These factors combined with others like the Bitcoin halving make BTC and other tokens attractive portfolio additions. As BTC continues its recovery and trades above $43,000, investors can look forward to potential gains in the coming months.
By
By
By