Coinbase warns of impending Bitcoin price decline despite reaching new all-time high
Coinbase, a leading cryptocurrency exchange, has recently issued a report highlighting potential obstacles that the Bitcoin market may face, despite its recent record-breaking highs.
The report emphasizes the crucial role of U.S. spot Bitcoin ETFs in sustaining demand and fueling the upward momentum of Bitcoin. However, Coinbase analysts David Duong and David Han caution that forthcoming macroeconomic and technical challenges could impact the market in the coming weeks.
One such challenge mentioned in the report is the Federal Reserve’s decision to cancel the Bank Term Financing Program (BTFP) on March 11. This move could have implications for banks and reintroduce problems into the financial system.
Additionally, the decisions made by fund managers to either decline or accumulate at the end of the quarter could further tighten the market. This combination of factors could potentially result in a period of limited Bitcoin trading until a significant event occurs – the highly anticipated Bitcoin halving in mid-April.
The Bitcoin halving event occurs every four years and involves a reduction in mining rewards by half. According to Coinbase’s report, this event could introduce a wave of unpredictability into the market and serve as a turning point for Bitcoin.
Interestingly, the report also explores the evolving role of exchange-traded funds (ETFs) in shaping Bitcoin’s behavior. ETFs currently hold nearly three times the amount of Bitcoin compared to miners, which adds a new dynamic and makes predicting market movements based on past cycles more challenging.
In conclusion, Coinbase’s report provides valuable insights into the challenges that lie ahead for Bitcoin. It offers a clearer understanding of the broader financial landscape and how the market is evolving. As the cryptocurrency world prepares to navigate these upcoming obstacles, all eyes are now focused on the Bitcoin halving event in mid-April. This highly anticipated event is expected to shape the future trajectory of the market and garner the attention of investors and enthusiasts alike.