Coinbase explained that total crypto volumes are slowing down due to the market attempting “to find the next narrative to power it higher.”
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Many crypto traders are eyeing the Bitcoin halving event as a primary driver for a potential price spike, but the time of year will be an obstacle, according to cryptocurrency exchange Coinbase.
The crypto market will need to find another narrative to further push up prices across the board, Coinbase further explained in its April 5 market commentary report.
“The BTC halving, currently due April 20 or 21, could be a catalyst for higher prices, but it will have to contend with what is typically a weak time of year for crypto markets and other risk assets,” the exchange stated.
BTC $69,255 has typically seen a monthly return of about 2.7% from June to September since 2011, while in the other eight months, it averaged a return of around 19.3%, according to data from digital assets research firm Brave New Coin.
Meanwhile, Coinbase further noted that overall crypto volumes “have also continued to slow as the market tries to find the next narrative to power it higher.”
Over the last 24 hours, the total crypto volume was $61.78 billion, a 33.25% decrease from the previous day, according to CoinMarketCap data.
However, the crypto exchange sees signs pointing toward the likelihood of an increase in new investors entering the crypto market in the near future:
“In our view, bitcoin’s increased acceptance as a form of “digital gold” could enable demand from a new subset of investors in this market regime.”
Bitcoin’s dominance in the overall crypto market is 50.6%, according to CoinStats data, which is the market capitalization of Bitcoin relative to the overall crypto market.
Bitcoin dominance chart. Source: CoinStats
Furthermore, the report explained that those awaiting price declines to invest may find the troughs to be less and less as more investors get involved.
“As a result, we think dips are likely to be more aggressively bought compared to previous cycles, even as volatility persists during price discovery,” Coinbase wrote.
Halving events have frequently been associated with spikes in the price of Bitcoin.
Following the previous halving event in May 2020, Bitcoin’s price surged. Starting at $8,787 during the halving, the cryptocurrency rallied, reaching nearly $69,000 in November 2021.
The plaintiffs contended that Coinbase was offering and selling unregistered securities. Furthermore, they accused the exchange of violating various provisions of securities laws.
However, Coinbase argued that secondary crypto asset sales didn’t meet securities transaction criteria, disputing the relevance of securities regulations.
