Crypto market analysts at Coinbase are predicting a bumpy ride for the remainder of Q3, 2024. According to David Duong and David Han from the US-based exchange, we can expect increased volatility in the coming month or two before a possible rally in the fourth quarter. JPMorgan analysts share a similar optimistic view, suggesting that crypto markets may bounce back as early as August.
The year started off strong for cryptocurrencies, especially Bitcoin, which hit a record high of over $73,000 fueled by the spot Bitcoin ETF narrative. However, the second quarter brought challenges such as interest rate decisions, miner capitulation, and significant selling from government-controlled wallets. These issues have spilled over into the third quarter, creating a supply overhang in the market.
One of the main contributors to this supply overhang is the German government’s Bundeskriminalamt (BKA) selling off seized bitcoins since June. Additionally, the uncertainty surrounding Mt. Gox has added to the market’s instability. Despite these challenges, analysts believe that the current lack of strong narratives in the crypto market will continue to result in choppy price action throughout Q3.
Looking towards Q4, there are some positive developments on the horizon. The recent approval of spot ETH ETFs by the SEC and the increasing number of SOL ETF applications are seen as key drivers for potential market growth. While there is some uncertainty about the impact of ETH ETF flows, Duong and Han remain optimistic about the positioning of Ethereum in the market.
As we move closer to the fourth quarter, factors such as potential interest rate cuts and the upcoming US election in November could have a significant impact on the market. Regardless of the election outcome, Bitcoin is seen as a strong investment option at current levels, especially as an alternative to traditional finance.
In conclusion, the next few months are expected to bring more volatility to the crypto market before a potential turnaround in late September. Investors should stay informed about market developments and be prepared for fluctuations in prices. Despite the challenges, there is optimism for a positive market outlook in the longer term.