Coinbase has cautioned that the current season may present hurdles for any significant upward movement in momentum, as traders anticipate a surge in Bitcoin (BTC) prices leading up to the upcoming halving event.
In its recent market commentary released on April 5th, Coinbase underscored the importance of the cryptocurrency market discovering alternative narratives to drive prices upwards.
While the Bitcoin halving, expected around April 20th or 21st, traditionally sparks anticipation for price hikes, Coinbase points out the historical trend of weakness in crypto markets and other risky assets during this time of year.
Data provided by digital assets research firm Brave New Coin indicates that, since 2011, Bitcoin has typically seen average monthly returns of about 2.7% from June to September. Conversely, the remaining eight months have boasted an average return of roughly 19.3%.
Crypto Volumes Continue to Slow Down
Coinbase also observed a slowdown in crypto volumes as the market seeks out its next driving force. According to data from CoinMarketCap, total crypto volume over the past 24 hours amounted to $61.78 billion, marking a notable 33.25% decrease from the previous day.
Despite these challenges, Coinbase identified potential indications of a fresh wave of investors entering the crypto market. The platform suggested that Bitcoin’s increasing recognition as a form of “digital gold” could attract a new subset of investors. Presently, Bitcoin holds a dominant position in the overall crypto market, with a share of 50.6%.
Moreover, Coinbase anticipates that price dips may encounter more aggressive buying compared to past cycles, even as volatility persists during the price discovery process. With more investors entering the market, downturns in price declines could become less pronounced.
Historically, halving events have been associated with significant surges in Bitcoin’s price. Following the last halving event in May 2020, Bitcoin witnessed a remarkable rally. Beginning at $8,787 during the halving, the cryptocurrency skyrocketed to nearly $69,000 by November 2021.
Bitcoin ETF Flows Expected to Remain Strong
In a recent analysis, on-chain analytics firm Santiment projected that spot Bitcoin exchange-traded fund (ETF) flows would remain robust leading up to the Bitcoin halving.
The company observed that Bitcoin ETF volume has sustained its pace since the asset’s mid-March all-time high. Santiment highlighted that trader activity continues to outpace the levels seen in late February, when individual trading surged.
“It’s highly probable that this heightened activity will persist leading up to the April 19th halving, though we’re intrigued to see whether a decline in ETF volume and on-chain volume will follow directly afterward,” Santiment stated.
According to Santiment’s findings, the top seven ETFs have collectively achieved a daily volume of $3.19 billion. Nevertheless, the firm is keen to monitor whether there will be a downturn in ETF volume and on-chain activity immediately after the halving event.
In a separate outlook, Matteo Greco, a research analyst at digital asset firm Fineqia International, anticipates Bitcoin reaching $75,000 by the time of the halving event.
“BTC halving events historically mark significant turning points followed by 9-18 months of upward momentum, culminating in cycle peaks,” Greco noted in a recent analysis.
