In its weekly market report, Coinbase claimed that the downward pressure on Bitcoin and the overall cryptocurrency market has begun to fade. According to analysts, this could potentially pave the way for a more supportive trading environment.
The report emphasizes that many technical factors that negatively affect cryptocurrency performance have begun to decrease. A key development that has alleviated much of the downward pressure, according to analysts, is the completion of FTX's bankruptcy estate's sale of significant GBTC assets. Coinbase analysts cited a recent CoinDesk report that mentioned the bankruptcy estate divested 22 million GBTC shares.
The report also noted that net inflows into spot Bitcoin ETFs in the US averaged over $200 million per day last week, and total net inflows since January 11 have reached $1.46 billion.
Coinbase analysts expect macro factors to become more important for cryptocurrencies in the coming weeks, which will be supportive of performance. The report emphasized that at the FED's last interest rate decision press conference, it was announced that the central bank's quantitative tightening program would be postponed to the next Federal Open Market Committee meeting on March 19-20. This indicates that the FED's monetary expansion cycle could possibly begin on May 1, while the end of the central bank's balance sheet reduction plans could begin in June.
The report concluded that the combination of reduced downward pressures on Bitcoin and the possibility of an interest rate cut in BTC coinciding with the halving event “could potentially support both Bitcoin and other tokens in Q2 2024.”
*This is not investment advice.