Coinbase analysts suggest a possible decrease in Bitcoin selling pressure as over $1.46 billion enters U.S. Bitcoin ETFs, indicating renewed investor interest. Despite recent market challenges, Bitcoin has shown resilience, posting a 3.5% gain over the past week.
Coinbase analysts recently observed a positive trend in the crypto market, indicating that downward pressures on Bitcoin and other cryptocurrencies might be approaching exhaustion.
Coinbase’s Market Report Sparks Investor Optimism
In their latest Weekly Market report, released on Friday, Coinbase offered a ray of hope to investors amidst recent market turmoil. Chinese journalist Colin Wu highlighted the report’s findings on X.
Coinbase analysts noted that downward pressure on Bitcoin has diminished significantly as the FTX bankruptcy estate sold off its large GBTC holdings. The Fed's monetary easing cycle, which is likely to begin on May 1, and the end of the balance sheet reduction program that began…
— Wu Blockchain (@WuBlockchain) February 3, 2024
The report highlighted pivotal developments contributing to this change in sentiment. Notably, the conclusion of FTX’s sale of its substantial Grayscale GBTC holdings, involving the disposal of 22 million GBTC shares, removed a significant obstacle to bullish momentum.
Furthermore, Coinbase analysts drew attention to a notable surge in net inflows into U.S. spot Bitcoin ETFs. With an average of over $200 million daily in the past week, the total inflow since January 11 reached $1.46 billion, signaling a resurgence of investor interest in the market.
Monetary Policy Developments and Future Speculations
The report also shed light on recent monetary policy decisions, particularly the U.S. Federal Reserve’s decision to postpone its quantitative tightening program until the next Federal Open Market Committee meeting in March. This delay, coupled with potential monetary easing starting in May, suggests a higher probability of a soft landing for the U.S. economy, as per Coinbase’s analysis.
Coinbase analysts speculate that a convergence of factors, including the potential for a rate cut coinciding with Bitcoin halving, could fuel a rally in Bitcoin and other tokens during the second quarter of 2024.
Despite experiencing a notable drop of over 20% in the last month, falling from a peak of $48,600 to a low of $38,740, Bitcoin has shown resilience. Posting a 3.5% gain in the past week, reaching $43,730, the cryptocurrency continues to navigate through market fluctuations.
Important:Â Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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