In the most recent Coinbase weekly report, analysts at the cryptocurrency exchange are expressing confidence in Bitcoin and the broader crypto market, anticipating a notably positive performance in Q2 2024. The endorsement comes as Bitcoin continues its rebound, with a 3.31% increase in the past week, pushing its value above $43,000.

Decreasing Pressure on Bitcoin, Macro Influences Take Center Stage: Insights from Analysts

The analysts at Coinbase highlighted the decline in market pressures that previously weighed on Bitcoin, attributing this shift to factors such as the completion of GBTC’s liquidations by defunct exchange FTX and the recovery of certain crypto entities from insolvency. This signals a transformation in the dynamics of the Bitcoin market. Additionally, the analysts underscored the stable performance of the Bitcoin spot ETF market, evidenced by the average daily net inflows of $200 million and a daily trading volume of $1.35 billion.

Looking ahead, the Coinbase analysts foresee macroeconomic factors playing a more significant role in the crypto market. Specifically, they pointed to the US Federal Reserve’s decision to delay discussions on scaling back quantitative tightening (QT) to the next Federal Open Market Committee (FOMC) meeting in March. Based on this, they anticipate the easing cycle to commence on May 1, potentially involving measures such as reducing interest rates to stimulate economic activity. Additionally, they predict the Fed to halt its balance sheet reductions by June to further support the US economy. They also suggest the possibility of the Fed ending the balance sheet reduction simultaneously with rate cuts, potentially cutting interest rates by 100 basis points, which is more than the Fed’s future rate anticipation.

Furthermore, the analysts pointed out that a reduction in interest rates generally bodes well for the digital asset ecosystem as it enables investors to borrow at lower rates, essentially accumulating more capital to invest in risk assets like cryptocurrencies. Taking into account these various factors, along with unique elements such as the Bitcoin halving, the analysts at Coinbase anticipate Bitcoin, alongside other tokens, to serve as favorable portfolio additions in Q2 2024.

Bitcoin Price Overview

Presently, Bitcoin is trading at $43,077.76, registering a 0.20% gain in the last day. Additionally, the digital asset’s daily trading volume has decreased by 15.45%, currently valued at $16.78 billion. With a market cap of $844.85 billion, Bitcoin continues to hold its position as the largest cryptocurrency globally.

BTC trading at $43,048 on the daily chart | Source: BTCUSD chart on Tradingview.com

Featured image from CNBC, chart from TradingView

Disclaimer: This article is intended for educational purposes only and does not represent NewsBTC’s opinions on investment decisions. Always conduct thorough research before making any investment decisions and use the provided information at your own risk.

FAQ

What is the basis for Coinbase analysts’ positive performance forecast for Bitcoin in Q2 2024?

The Coinbase analysts are basing their positive forecast on a combination of factors, including the alleviation of downward market pressures on Bitcoin, stable performance in the Bitcoin spot ETF market, and the anticipated influence of macroeconomic factors such as the US Federal Reserve’s potential easing cycle.

How does a reduction in interest rates impact the digital asset ecosystem?

A reduction in interest rates is generally viewed positively for the digital asset ecosystem as it allows investors to borrow at lower rates, enabling them to accumulate more capital for investment in risk assets like cryptocurrencies.

What is the current price and trading volume of Bitcoin?

At the time of writing, Bitcoin is trading at $43,077.76 with a daily trading volume of $16.78 billion.