Coinbase Analyst: Downward Pressure on Bitcoin Has Weakened, Macro Factors and Halving Effect May Unfold in April

The latest report released by Coinbase analysts indicates that the technical factors that have been suppressing Bitcoin and the cryptocurrency market for a long time may have come to an end. Recent events such as FTX selling its GBTC positions through ETF to unwind significant positions, and the institutional Celsius undergoing bankruptcy reorganization being able to successfully repay creditors. In addition, in the past week, the daily inflow of funds into the U.S. Bitcoin spot ETF exceeded $200 million, totaling $1.46 billion since January 11, along with a healthy daily trading volume of approximately $1.35 billion, laying the foundation for bullish prospects.

Bloomberg analysis on Bitcoin spot ETF: FTX and DCG dumping affecting GBTC

The report states that, based on macro factors, the market is expected to see impressive performance.

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Uncertainties in the Overall Economy

Coinbase analysts believe that the United States is at a crossroads, with signs pointing to the economy potentially experiencing a "soft landing," challenging the balance between economic activity and inflation.

The Federal Reserve's preferred inflation indicator, core PCE, is quite consistent with its long-term 2% target, reflecting a resilient economy supported by government and consumer spending. However, the expanding U.S. budget deficit and cooling labor market have led to a decrease in the personal savings rate to 17.6% last year, predicting a possible economic slowdown in the first half of 2024. Additionally, there are concerns about the stability of local banks, especially with New York community banks. Despite these headwinds, there is still hope to avoid a full recession.

New York community banks plummet by 30%, BitMEX Founder: Bitcoin Will Replicate Last Year's Rally

The Fed May Cut Interest Rates This Year

A recent statement from the Fed indicates their current stance, emphasizing a shift towards a more balanced approach to achieve employment and inflation goals. However, uncertainty remains about the inflation trajectory leading up to the March meeting, delaying discussions on adjusting quantitative tightening strategies. Starting on May 1st, there is a possibility of interest rate adjustments simultaneously with, or shortly after, halting the reduction of the balance sheet. Although the market expects the Fed to cut rates by 100 basis points this year, aligning with the conservative strategy common in election years.

Halving Event at the End of April

With the upcoming Bitcoin halving event at the end of April and ETF issuers increasing marketing activities, Bitcoin spot ETFs are gradually being included in investment portfolios by managed funds, injecting new liquidity into the market. These factors will benefit Bitcoin and inject vitality into the broader token ecosystem by the second quarter of 2024.