Crypto traders are eagerly anticipating the Bitcoin halving event as a potential catalyst for a surge in prices. However, Coinbase, a leading cryptocurrency exchange, warns that the time of year could pose a challenge. In its market commentary report on April 5, Coinbase states that the crypto market will need to find another narrative to drive prices higher.
The BTC halving, scheduled for April 20 or 21, may indeed lead to higher prices, but it will have to contend with the historically weak period for crypto markets and other risk assets, according to Coinbase. Data from digital assets research firm Brave New Coin reveals that Bitcoin has typically seen a monthly return of around 2.7% from June to September since 2011. In the other eight months, the average return has been approximately 19.3%.
Coinbase also highlights that overall crypto volumes have been slowing down as the market searches for the next catalyst. CoinMarketCap data shows that in the past 24 hours, the total crypto volume was $61.78 billion, representing a 33.25% decrease from the previous day.
However, Coinbase identifies signs that indicate an increase in new investors entering the crypto market in the near future. CoinStats data reveals that Bitcoin’s dominance in the overall crypto market is currently at 50.6%, measured by its market capitalization relative to the total crypto market.
Additionally, the report suggests that those waiting for price declines to invest may find fewer opportunities as more investors enter the market. Coinbase believes that dips are likely to be more aggressively bought compared to previous cycles, even as volatility persists during price discovery.
Historically, halving events have been associated with significant price spikes in Bitcoin. Following the previous halving event in May 2020, Bitcoin’s price surged, starting at $8,787 during the halving and reaching nearly $69,000 in November 2021.
In related news, Coinbase recently won a lawsuit affirming that the secondary sales of cryptocurrencies on its platform do not violate the Securities Exchange Act. The United States Court of Appeals for the Second Circuit ruled in favor of Coinbase, dismissing allegations that the exchange was offering and selling unregistered securities and violating securities laws.
Overall, despite the challenges posed by the time of year, Coinbase remains optimistic about the potential for a price surge driven by the Bitcoin halving event and the entry of new investors into the crypto market.