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Cryptocurrency Markets Likely to Remain Choppy in Q3, Coinbase Analysts Say
Cryptocurrency price action is likely to continue on a up-and-down trajectory for the remainder of Q3 2024, according to analysts at cryptocurrency exchange Coinbase.
Coinbase’s head of institutional research David Duong and David Han, an analyst at the U.S.-based cryptocurrency exchange, They shared their predictions in the firm’s weekly market report. They expect more volatility for cryptocurrencies in the next month or two before a potential rally in the fourth quarter.
JPMorgan analysts offered a similar bullish analysis, albeit with a different timing, noting Cryptocurrency Markets May Rebound in August.
The third quarter started on a bitter note
The cryptocurrency market has been on a bullish streak at the beginning of this year, driven by news of a spot Bitcoin ETF, with Bitcoin hitting a new all-time high above $73,000.
However, the second quarter saw broader market headwinds due to multiple headwinds, including interest rate decisions, miner capitulation, and significant sell-offs by government-controlled e-wallets, which extended into the third quarter.
“The third quarter started on a sour note with oversupplies generated by indiscriminate selling of bitcoin from price-insensitive sources. This includes the German government’s Bundeskriminalamt (BKA), which began selling its supply of seized bitcoin on June 19,” analysts said in a commentary published Friday.
Another factor is Mt. Gox, and analysts say the uncertainty could be more damaging than the sales themselves.
“For now, we expect price action to remain choppy in Q3 2024, as crypto markets still lack solid narratives,” they wrote.
Analysts have a bullish outlook for the fourth quarter
On a positive note, the SEC approval of spot ETH ETFs and recent SOL ETF applications are key developments. Despite market uncertainty about whether ETH ETF flows will be bullish or bearish, Duong and Han believe the outlook is hardly negative “from a positioning perspective.”
“This could leave room for surprising outperformance and offer ETH more support, even if flows take some time to materialize. Overall, however, we believe the next couple of months will likely produce more volatility before things start to improve more seriously in late September,” the two added.
Looking ahead to the fourth quarter, potential interest rate cuts and the US elections in November could have a significant impact on the market.
Fiscal expansion, regardless of the election outcome, could position Bitcoin as a good buy at current levels, especially as an alternative to traditional finance.