Despite Bitcoin (BTC) hitting its highest price, New all-time highCryptocurrency markets face macro headwinds and negative technical factors in the near term, which could limit further upside, Coinbase (COIN) said in a report on Friday.
Analysts David Duong and David Hung said: “While the short-covering activity that contributed to the initial upside appears to have exhausted itself, US spot Bitcoin ETFs remain an important anchor for Bitcoin demand.” writes.
In previous cycles, “liquidity conditions” were the main factor inhibiting price momentum, but that does not seem to be the case now. Still, these supporting factors are “likely to encounter some significant macro and technical headwinds in the coming weeks,” the authors write.
The Federal Reserve System is bank term loan program The report said the BTFP scheme, which was used to support regional banks in the United States, will expire on March 11, adding: “This may eliminate arbitrage opportunities for banks, but at the cost of “This could reintroduce vulnerabilities into the financial system,” he added.
Additionally, the note said a decline in fund managers' cash reserves, coupled with end-of-quarter rebalancing, could weigh on liquidity.
Due to these countervailing dynamics, Coinbase believes that the most likely scenario is for Bitcoin to trade within a narrow range until “the next singular event, the Bitcoin halving in mid-April.” He said there is.of Half-remuneration once every four years Bitcoin mining rewards will be reduced by 50%.
Coinbase points out that exchange-traded funds have changed Bitcoin's market dynamics, eroding the usefulness of studying past halving cycles. “The cumulative net growth rate of BTC held by ETFs has exceeded the net growth rate generated by miners by nearly three times,” the report added.
