Many traders in the cryptocurrency market are anticipating the Bitcoin halving event as a key driver for a potential increase in prices. However, Coinbase, a cryptocurrency exchange, believes that the time of year may pose a challenge to this expectation.
In its market commentary report on April 5, Coinbase explained that the crypto market will need to find another narrative to further boost prices. The exchange stated that while the BTC halving is scheduled for April 20 or 21 and could potentially lead to higher prices, it will have to compete with the typically weak period for crypto markets and other risk assets during this time of year.
According to data from Brave New Coin, Bitcoin has historically seen a monthly return of about 2.7% from June to September since 2011, while in the other eight months, it has averaged a return of around 19.3%. This suggests that the summer months tend to be less favorable for Bitcoin prices.
Coinbase also noted that overall crypto volumes have been slowing down as the market searches for the next catalyst to drive prices higher. CoinMarketCap data shows that the total crypto volume over the past 24 hours was $61.78 billion, a 33.25% decrease from the previous day.
Despite these factors, Coinbase sees indications that new investors may enter the crypto market in the near future. CoinStats data reveals that Bitcoin’s dominance in the overall crypto market is currently at 50.6%, indicating its market capitalization relative to the rest of the crypto market.
The report further explained that as more investors get involved, those waiting for price declines to invest may find fewer opportunities to buy at lower prices. Coinbase believes that dips in prices are likely to be more aggressively bought compared to previous cycles, even as volatility persists during price discovery.
Historically, halving events have often been associated with price spikes in Bitcoin. For example, after 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 in which it was accused of offering and selling unregistered securities. The United States Court of Appeals for the Second Circuit ruled in favor of Coinbase, confirming that the secondary sales of cryptocurrencies on its platform do not violate the Securities Exchange Act.
Overall, despite the challenges posed by the time of year and slowing crypto volumes, Coinbase remains optimistic about the potential for increased investor participation and the impact of the Bitcoin halving event on prices.