The crypto market appears to be in for a tumultuous few months, according to the most recent predictions from leading industry analysts.
Despite the positive trend of the crypto market earlier this year, the second and third quarters of 2024 have experienced significant headwinds, driven by the anticipated introduction of spot Bitcoin ETFs. “The third quarter commenced on a negative note,” according to David Duong, the director of institutional research at Coinbase.
The crypto exchange stated that the market has been significantly impacted by supply overhangs that have been generated by indiscriminate Bitcoin selling from price-insensitive sources, particularly the Bundeskriminalamt (BKA) of the German government.
Duong and his colleague David Han, an analyst at Coinbase, project that the price movement will remain “choppy” throughout Q3 2024 due to the absence of compelling narratives in the market. “We anticipate that the price action will continue to be volatile in 3Q24, as the crypto markets are still in need of compelling narratives,” they stated in a post published late Friday.
According to Duong, the market may be significantly affected by the US election in November and potential interest rate decreases in the fourth quarter. Despite the fact that Coinbase warns that rate reductions may not always be beneficial in the event of broader economic concerns, the analysts believe that if the economy remains relatively robust, the rate cuts could “attract retail participation and release additional liquidity.”
The potential for fiscal expansion, which is not contingent upon the outcome, is an additional wild card in the upcoming US election in November. According to the experts, fiscal expansion may serve as a viable investment opportunity for Bitcoin at its current price, particularly as an alternative to conventional finance, regardless of the elections outcome.
Experts at JPMorgan share Coinbase’s projection and also anticipate a potential cryptocurrency market rebound, albeit on a different timescale. Despite the fact that the date was different, JPMorgan analysts maintained a similarly optimistic outlook, asserting that the crypto markets may recover in August.
The most recent legislative developments—the SEC’s approval of spot ETH ETFs and the receipt of applications for SOL ETFs—provide an encouraging indication for the crypto sector. Despite the fact that the experts are uncertain about the full impact on ETH prices, they believe that the prognosis is unlikely to be adverse from a positioning perspective.
The Coinbase analysts suggest that this could provide ETH with additional support and allow for unexpected outperformance, even if the flows require time to manifest.
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