Downside Pressures on Bitcoin and Cryptocurrency Market Starting to Ease, Says Coinbase Analysts
According to analysts at Coinbase, the downward pressures on bitcoin and the broader cryptocurrency market are beginning to diminish, potentially leading to a more supportive trading environment. Coinbase’s Weekly Market report highlighted several technical factors that have been exerting downside pressure but are now becoming exhausted. One significant development mentioned in the report is the completion of FTX’s bankruptcy estate selling its GBTC holdings. Additionally, the report noted that net inflows into U.S. spot bitcoin ETFs have averaged over $200 million per day in the past week, indicating a more positive trend. These factors suggest that macroeconomic factors may become more relevant and supportive for the digital asset class in the coming weeks.
Possibility of Rate Cuts and Soft Landing for US Economy
The Coinbase report also discussed the recent rate decision by the U.S. Federal Reserve. It was announced that there would be a delay in the central bank’s quantitative tightening program, indicating a potential start of the monetary easing cycle on May 1. The report suggested that this decision, along with positive economic indicators and inflation trends, increases the likelihood of a soft landing for the U.S. economy. The combination of diminishing downside pressures on bitcoin and the possibility of a rate cut coinciding with the bitcoin halving could potentially boost both bitcoin and other tokens in Q2 2024.
Hot Take: Potential Recovery Ahead for Bitcoin and Cryptocurrencies
Overall, Coinbase analysts believe that the recent developments indicate a more favorable trading environment for bitcoin and cryptocurrencies. With technical factors exerting less downward pressure and positive macroeconomic trends emerging, there is a possibility of recovery and growth in the crypto market. This could benefit both bitcoin and other tokens, particularly if there is a rate cut and the bitcoin halving event occurs simultaneously. While there are no guarantees in the volatile cryptocurrency market, these factors provide hope for a potential upswing in the coming months.
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