«We anticipate a choppy market for bitcoin in the third quarter»: Coinbase

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By TP

Key facts: Coinbase expects a more constructive environment for cryptocurrencies by the end of 2024. For the exchange, the US economy will avoid a recession. Amid uncertainty about which direction the price of bitcoin (BTC) will take while it has been below its all-time high for 5 months, the cryptocurrency exchange Coinbase revealed its vision. “Our views on the market have not changed despite the recent sell-off that has disconcerted investors,” said the exchange’s institutional team. Their expectations remain optimistic for the year, beyond the concerns about the US economic scenario. In a report, Coinbase said: “We anticipate a choppy market in the third quarter, but also expect a more constructive environment for cryptocurrency markets to materialize in the fourth.” This projection presupposes, they clarified, that The US economy will avoid a recession, even if it slows“We expect price action to remain range bound at least until the FOMC meeting on September 17-18,” they said. The reason is that they see a lack of fresh catalysts for the cryptocurrency space in the coming months. Meanwhile, the coin remains in a sideways range for the past five months, as seen below.

Bitcoin price in the last six months. Source: TradingView. In this sense, they believe that the influence of macroeconomic factors on prices may be more dominant in the short term. “The Jackson Hole Economic Symposium, which will be held from August 22 to 24, will probably be the next major macroeconomic event that could test the pulse of the markets,” they warned. Likewise, Grayscale, a company that issues crypto-asset exchange-traded funds (ETFs), has considered the symposium as a key event to be followed by the markets. As BitcoinDynamic reported, Jerome Powell, president of the Federal Reserve (Fed), will be present at this event, so he can give signals about the next FOMC decision.

Markets will continue to wait for economic announcements, according to specialists

The FOMC, the body in charge of monetary policy, is expected to cut interest rates in September, due to the slowdown in inflation. This leads to lower bond yields and allows for a boost to other markets. However, Rising unemployment has raised fears of both recession and the need for a drastic rate cut. to counteract it. Therefore, specialists expect to see the markets waiting for the next economic announcements. According to analysts at the Bitfinex exchange, a moderate (not drastic) change in monetary policy is positive for bitcoin. Similarly, Grayscale believes that if the US economy slows down without falling into recession, bitcoin will retest its all-time high price by the end of this year.

Coinbase expects many institutional players to remain cautious about their risk exposure in the coming weeks. However, they expect demand to increase as a better environment forms in the last months of 2024. In the cryptocurrency perpetual futures market, there was a high degree of deleveraging after more than USD 1.6 billion in liquidations at the beginning of August. According to Coinbase, this suggests that positioning is much cleaner now, which is a positive technical factor. In addition, it sees a possible rebound in this scenario in the demand for ether (ETH) ETFs, after its moderate launch in the United States. This is a factor that can motivate the general market sentiment, added to the presidential elections in November if there is a victory for Donald Trump, who identifies himself as pro-bitcoin. «All this supports our constructive long-term vision,» concludes the exchange in reference to the bitcoin and cryptoasset market.