Coinbase Forecasts Bitcoin Bull Run in Q2, 2024 Amid U.S. and Global Developments
As we step into the year 2024, Coinbase’s weekly “Constructive Outlook” predicts a bullish run for Bitcoin, backed by a combination of macroeconomic and technical factors.
Bitcoin ETFs and the U.S. Economy
There has been a noticeable shift in focus from technical factors to macroeconomic influences. Recent large liquidations, like FTX’s decision to sell off shares of Grayscale Bitcoin Trust, have coincided with a surge in net inflows into US spot Bitcoin ETFs, averaging over $200 million per day. This increase in ETF activity, amounting to $1.46 billion since January 11, indicates a growing market sentiment in favor of digital assets.
The U.S. economy’s core PCE inflation aligns with the Federal Reserve’s long-term target. However, concerns are rising over a widening budget deficit and a cooling labor market. Despite strong retail sales, the economy may experience a slowdown in the first half of 2024.
The Federal Reserve, acknowledging balanced risks, has postponed decisions on tapering its quantitative tightening program until the end of March. This suggests the possibility of an easing cycle starting on May 1, which coincides with Bitcoin’s halving in late April. This alignment could potentially provide support for digital assets.
Solana’s JUP Airdrop
Solana’s recent airdrop for Jupiter, one of the largest ever, signifies a revitalized ecosystem. The launch of new tokens and increasing inflows of stablecoins contribute to the appeal of Solana for developers. Despite some challenges during the airdrop, such as transaction failures and fee surges, Solana has demonstrated resilience and a commitment to improving performance. The upcoming 1.18 release aims to address these issues, highlighting the industry’s focus on enhancing user experiences.
Notable Developments
FTX’s commitment to reimbursing customers, the potential approval of spot Ethereum ETFs by the SEC, and global regulatory developments all highlight the evolving landscape of cryptocurrencies. Institutional and regulatory advancements play a significant role in shaping market sentiment.
Crypto and digital asset developments are not limited to the United States; they are also occurring worldwide. The global crypto landscape is dynamic, ranging from the Bank of England’s exploration of a digital pound to the EU’s MiCA regulatory guidelines and Germany’s significant seizure of Bitcoin.
Coinbase’s report reveals positive market sentiment, with Bitcoin’s CME OI stabilizing and solid ETF flows. However, there are concerns about Ethereum’s declining interest. The increasing comfort of traders with long exposure to cryptocurrencies suggests a favorable market outlook. As we progress through the second quarter of 2024, these trends paint a positive picture for Bitcoin.
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