According to the latest forecasts from the best analysts in the sector, the cryptocurrency market seems to be ready for a crazy race over the next few months.
Cryptocurrency Volatility Expected to Persist Through Q3
Driven by the expected introduction of Bitcoin spot ETFs, despite the positive trend in the cryptocurrency market at the start of the year, the second and third quarters of 2024 have seen notable headwinds. “The third quarter started on a sour note,” says David Duong, head of institutional research at Coinbase.
The market was heavily affected by excess supply created by blind buying. Selling Bitcoin from price-insensitive sources, including the German government’s Bundeskriminalamt (BKA), the crypto exchange said.
As the market lacks compelling narratives, Duong and fellow Coinbase analyst David Han predict that price action will remain “choppy” throughout the third quarter of 2024. “For now, we expect price action to remain choppy in Q3 2024 as cryptocurrency markets continue to lack strong narratives,” they said in a paper published Friday evening.
As analysts focus on the final quarter of the year, their outlook becomes more optimistic.
Potential rebound in fourth quarter driven by macroeconomic factors
Looking ahead to the fourth quarter, Duong notes that potential interest rate cuts and the November U.S. election could have a major impact on the market. While Coinbase cautions that while concerns about an economic slowdown are broader, rate cuts may not always be positive, analysts still believe that if the economy remains strong, rate cuts could “unlock more liquidity and attract retail participation.”
As of today, the market cap of cryptocurrencies hit $2.11 trillion. Chart: TradingView.com
Another wild card for the approach US Elections In November, it is possible that the country will see a fiscal expansion, regardless of the election outcome. Regardless of the election outcome, the fiscal expansion could help position bitcoin as a solid buy at current levels, especially as an alternative to conventional finance, experts suggest.
JPMorgan analysts offer similarly optimistic outlook
JPMorgan experts, however, confirmed Coinbase’s projections and predicted a possible comeback for the cryptocurrency market. JPMorgan analysts, however, took a similarly optimistic view, saying that cryptocurrency markets could recover in August.
Approval of Spot ETFs seen as a positive
Latest Legislative Developments: SEC Authorizes Cash Transactions ETF ETH and obtaining applications for SOL ETFs – offer an encouraging indication for the cryptocurrency sector. While experts are unsure of the overall effect on ETH prices, from a positioning perspective, they believe the prognosis should not be bad.
This could leave room for surprise outperformance and provide ETH with more support, even if flows take time to materialize, Coinbase analysts say.
Featured image from Norris Inc., chart by TradingView
