Coinbase Institutional shared its opinion that as Bitcoin enters a new price zone, the broader crypto market may struggle with macro and technical factors in the coming weeks.
“We believe the crypto could encounter significant macroeconomic headwinds and negative technical factors in the coming weeks before we can see the next leg up.” wrote David Duong, head of institutional research at Coinbase, and David Han, institutional research analyst at the firm.
Examples of factors that could dampen prices include expectations that the U.S. Federal Reserve will allow banks’ term funding program to expire today, potentially closing an arbitrage opportunity for banks.
Additionally, last month’s Consumer Price Index is expected to be shared tomorrow, and any negative surprises could lead to a pullback for cryptocurrencies.
Additionally, Coinbase Institutional believes liquidity could be tied up due to fund managers’ end-of-quarter rebalancing and dwindling cash reserves.
The pair also added that they believe the comparison between newly mined bitcoins and ETF flows fails to capture the whole story regarding long-term cyclical supply trends.
Despite the report released on Friday, the price of Bitcoin continued to climb as of this week.
Disclaimer: The Block is an independent media outlet providing news, research and data. Since November 2023, Foresight Ventures has been a majority investor in The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to provide objective, impactful and current information about the crypto industry. Here is our current financial information.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.