Coinbase warns of :
challenges ahead for Bitcoin :
scaling amid 'weak period of year'
- Coinbase has cautioned that the current period presents challenges to
- the upward momentum as Bitcoin (BTC) traders anticipate price
- increases ahead of the Bitcoin halving event.
In its market commentary report published on April 5th, Coinbase emphasized
the necessity for the cryptocurrency market to find alternative
narratives to drive prices upward.
The upcoming Bitcoin halving, scheduled around April 20th or 21st
is often seen as a catalyst for price increases.
However :
Coinbase highlighted the historical weakness of
cryptocurrency and other asset markets during this time of the year.
Data from digital asset research firm, Primitive Ventures, reveals that Bitcoin
has experienced average monthly returns of around 2.7%
from June to September since 2011.
Conversely :
- the remaining eight
- months have seen average
- returns of about 19.3%.
Trading volumes in cryptocurrencies continue to slow down.
Coinbase also noted that trading volumes in cryptocurrencies
have begun to decline as the market searches for the next driving force.
Over the past 24 hours
the total cryptocurrency trading volume amounted to $61.78 billion, representing
a significant 33.25% decrease from the previous day
according to CoinMarketCap data.
Despite these challenges, Coinbase identified potential signs indicating
a new influx of investors into the cryptocurrency market.
The platform suggested that increasing acceptance of Bitcoin as a form of
"digital gold" may attract a new class of investors. Currently
Bitcoin's dominance in the cryptocurrency market stands at 50.6%.
Furthermore :
Coinbase expects dip-buying to be
more aggressive compared to previous cycles, amid ongoing price volatility.
With more investors entering the market
cryptocurrency price declines may become less severe.
Historically :
supply reduction events have been associated with Bitcoin price hikes.
- Following the previous halving event in May 2020, Bitcoin witnessed
- a significant increase. Starting at $8,787 during the halving
- the cryptocurrency rose to nearly $69,000 by November 2021.
Investment fund flows into Bitcoin are expected to remain strong.
In a recent analysis :
data analytics firm Santiment mentioned that investment fund flows into
publicly traded Bitcoin are expected to remain strong until the Bitcoin halving.
The company noted that the trading volume of publicly traded Bitcoin funds
has not slowed down since reaching its highest point in mid-March.
- Santiment confirmed that
- trading activity remains higher than
- the turning point in late February when retail trading surged.
"There is strong likelihood that high activity will continue before the Bitcoin
halving on April 19th, but it will be interesting to see if there is a direct drop in
the volume of traded investment funds and immediate chain size after that."
Santiment reported that the top seven traded exchange
traded funds have seen a daily volume of $3.19 billion.
However :
- the company expressed interest in monitoring whether there
- will be a decline in the volume of traded investment funds
Meanwhile :
Matthew Grigio, a research analyst at digital asset firm Venexia International
expects Bitcoin's price to reach $75,000 by the time of the halving event.
In a recent memo, he wrote:
"Historically, Bitcoin halving events are significant points followed by upward
periods lasting from 9 to 18 months, culminating in cycle peaks.
Comments
Post a Comment