Based on the latest predictions from top industry analysts, the crypto market appears ready for a wild ride in the next months.
Crypto volatility to continue through Q3
Fueled by the expected launch of spot Bitcoin ETFs, despite the crypto market’s positive trend earlier this year, the second and third quarters of 2024 have seen notable headwinds. “Q3 started off on a sour note,” said David Duong, head of institutional research at Coinbase.
The market is strongly influenced by the supply surplus created by random Sell Bitcoin According to the crypto exchange, the data comes from sources that are not sensitive to price, namely the German government’s Bundeskriminalamt (BKA).
With the market lacking compelling narratives, Duong and his colleague David Han, an analyst at Coinbase, predict that price action will remain “chopty” throughout the third quarter of 2024. “For now, we expect price action to remain choppy in Q3 2024 as crypto markets still lack compelling narratives,” they said in a note late Friday.
As analysts focus on the final quarter of the year, their outlook becomes more optimistic.
Potential Q4 rebound driven by macro factors
Looking ahead to the fourth quarter, Duong notes that potential rate cuts and the US election in November could have a big impact on the market. While Coinbase cautions that if there are broader concerns about an economic downturn, the rate cut won’t always be positive; still, the analysts believe that if the economy remains relatively strong, the rate cuts could “free up 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 approaching American elections in november, the possibility of fiscal expansion is independent of the outcome. Regardless of the outcome of the election, fiscal expansion could help position Bitcoin as a solid buy at current levels, especially as an alternative to conventional finance, experts suggest.
Analysts at JPMorgan offer a similarly optimistic outlook
Although on a different timescale, experts at JPMorgan echo Coinbase’s forecast and also predict a potential comeback for the crypto market. Although on a different date, JPMorgan analysts had a similarly optimistic view stating that crypto markets could recover in August.
The approval of spot ETFs is seen as positive
Latest Legislative Developments: SEC Allows Spot Trades ETH ETFs and getting applications for SOL ETFs, offer an encouraging indication for the crypto sector. While experts are not sure about the full effect on ETH prices, from a positioning standpoint, they believe the prognosis is unlikely to be bad.
According to Coinbase analysts, this could provide scope for surprise outperformance and provide ETH with more support, even if it takes some time for money flows to start flowing.
Main image of Norris Inc., chart from TradingView