Analysts at Coinbase Predict a Healthier Trading Environment for Crypto Market
Coinbase, a top US-based crypto exchange, believes that the fading downside pressures in the crypto market could lead to a more favorable trading environment. According to Coinbase’s analysis, factors that have been dampening Bitcoin and the broader digital assets industry, such as FTX’s liquidations and the financial troubles of Celsius, are clearing up.
The recent liquidations at FTX, including the disposal of Grayscale Bitcoin Trust shares, indicate that many technical pressures on Bitcoin and crypto in general are starting to diminish. Additionally, net inflows into US spot Bitcoin ETFs have been averaging over $200 million daily in the past week.
Coinbase expects macro factors to become more relevant for the digital asset class in the coming weeks, which could support its performance. The Federal Reserve’s anticipated loosening of monetary policies in May, combined with Bitcoin’s halving event in April, is expected to create a positive setup for crypto assets overall.
Positive Outlook for Crypto Assets
Coinbase predicts that rate cuts in the US starting in May, along with the tapering of quantitative tightening, will align with events like the Bitcoin halving and contribute to a positive environment for the entire asset class. Bitcoin’s halving occurs every four years when miners’ rewards are halved.
Hot Take: Fading Downside Pressures Could Foster a Better Trading Environment
According to analysts at Coinbase, various factors weighing on the crypto market are subsiding, potentially creating healthier conditions for investors. Liquidations by FTX and the resolution of financial issues faced by Celsius have contributed to this trend. Inflows into US spot Bitcoin ETFs have also been significant. As a result, Coinbase expects macro factors to play a bigger role in the digital asset class, which could positively impact performance. Furthermore, the combination of the Federal Reserve’s monetary policy changes and Bitcoin’s halving event is expected to create a favorable setup for crypto assets. This optimistic outlook suggests that the market may be entering a more conducive trading environment.
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