Cryptocurrency traders set their sights on the Bitcoin halving event as a key catalyst for a potential price surge. However, according to Coinbase, the year’s timing presents a significant challenge.
In its April 5 market commentary report, Coinbase elaborated that the cryptocurrency market must discover an alternative narrative to drive prices higher.
The upcoming BTC halving, slated for April 20 or 21, might trigger increased prices. However, it will face the challenge of occurring during a historically sluggish period for crypto markets and other risky assets,” noted the exchange.
According to data from Brave New Coin, Bitcoin (BTC) typically experiences a monthly return of approximately 2.7% from June to September since 2011. Conversely, its average return hovers around 19.3% in the remaining eight months.
Additionally, Coinbase highlighted that the cryptocurrency market’s trading volumes have sustained a slowdown as it seeks a new catalyst for upward momentum. According to CoinMarketCap, the total crypto volume over the past 24 hours amounted to $61.78 billion, marking a decline of 33.25% compared to the preceding day.
Nevertheless, the cryptocurrency exchange identifies indicators suggesting a probable surge in fresh investors venturing into the crypto market soon.
We believe that the growing recognition of bitcoin as a potential ‘digital gold’ could prompt interest from a fresh cohort of investors in the current market environment.
Bitcoin Dominance Spurs Market Confidence
According to data from CoinStats, Bitcoin currently holds a dominant position in the crypto market, accounting for 50.6% of its total capitalization. The report also suggests that as more investors participate, the opportunities for significant price declines may diminish for those waiting to invest during market dips.
However, As a consequence, we anticipate that dips will be met with more assertive buying compared to past cycles, even amidst ongoing volatility during price discovery,” stated Coinbase.
Historical patterns suggest that halving events often coincide with significant Bitcoin price increases. For instance, after the last halving event in May 2020, Bitcoin experienced a notable surge. The cryptocurrency soared to $8,787 when the halving occurred, peaking at almost $69,000 by Nov 2021.
Related Reading | Coinbase cleared in lawsuit over crypto transactions
Furthermore, the author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.
Comments (No)