Many cryptocurrency traders are considering the Bitcoin halving event as the main driver of a possible price increase, but the time of year will be a hurdle, according to cryptocurrency exchange Coinbase.
The cryptocurrency market will need to find another narrative to drive prices up further across the board, Coinbase explained in its April 5 market commentary report.
"The BTC halving, which currently expires on April 20 or 21, could be a catalyst for higher prices, but will have to contend with what is typically a weak time of year for crypto markets and other risk assets." "the exchange stated.
bitcoin It has typically seen a monthly return of around 2.7% from June to September since 2011, while in the other eight months, it averaged a return of around 19.3%, according to data from research firm Brave New Coin digital assets.
Meanwhile, Coinbase further noted that overall cryptocurrency volumes "have also continued to slow as the market tries to find the next narrative to drive it higher."
In the last 24 hours, the total cryptocurrency volume was $61.78 billion, a decrease of 33.25% from the previous day, according to data from CoinMarketCap.
However, the cryptocurrency exchange sees signs pointing towards the likelihood of an increase in new investors entering the cryptocurrency market in the near future:
“In our view, the greater acceptance of bitcoin as a form of “digital gold” could enable demand from a new subset of investors in this market regime.”
Bitcoin's dominance in the overall crypto market is 50.6%, according to data from CoinStats, which is the market capitalization of Bitcoin relative to the overall crypto market.
Additionally, the report explains that those who wait for price drops to invest may find that the lows become smaller as more investors get involved.
“As a result, we believe dips are likely to be bought more aggressively compared to previous cycles, even if volatility persists during price discovery,” Coinbase wrote.
Halving events have frequently been associated with spikes in the price of Bitcoin.
Following the previous halving event in May 2020, the price of Bitcoin skyrocketed. Starting at $8,787 during the halving, the cryptocurrency recovered, reaching almost $69,000 in November 2021.
On April 6, Cointelegraph reported that the United States Court of Appeals for the Second Circuit ruled in favor of Coinbase, confirming that secondary sales of cryptocurrencies on its platform do not violate the Securities Exchange Act.
The plaintiffs argued that Coinbase was offering and selling unregistered securities. Additionally, they accused the exchange of violating several provisions of securities laws.
However, Coinbase argued that secondary sales of crypto assets did not meet securities transaction criteria, questioning the relevance of securities regulations.
