The research draws comparisons between the ongoing crypto market cycle and the period from 2018 to 2022, characterized by substantial price increases in both cryptocurrencies. Examining the Potential Impact of Bitcoin Halving on Crypto Markets.
Analysts emphasize various cyclicality metrics, including net unrealized profit/loss and supply in profit, reflecting historical trends. These metrics suggest that the current state of the crypto markets does not resemble the euphoric conditions witnessed during the peak of 2023, hinting at the possibility of further surges. Despite acknowledging the potential positive impact of the upcoming Bitcoin halving, Coinbase Research remains cautious. The paper notes a lack of robust supporting evidence and characterizes the relationship between the halving and market performance as somewhat speculative.
The research points out that, with only three halving events historically, there isn’t a fully established pattern, especially considering previous events were influenced by factors like global liquidity measures. The upcoming Bitcoin halving, projected for April 2024 based on current mining rates, will reduce the block reward from 6.25 to 3.125 BTC. Analyzing Ethereum’s Market and Anticipated Upgrade.
In 2023, Ethereum (ETH) experienced a price surge of over 90%, driven by factors such as the success of the Shapella upgrade and the increasing likelihood of approval for spot crypto ETFs. The market responded positively to these developments, contributing to the rise in ETH value. Looking forward, analysts are focusing on the upcoming Ethereum upgrade named Cancun. This upgrade is expected to enhance scalability and security, making layer-2 transactions as cost-effective as possible. The successful implementation of Cancun could potentially lead to a significant increase in the number of processed transactions on the Ethereum network.
Coinbase’s analysis highlights that Bitcoin and Ethereum have undergone two cycles, encompassing both bull and bear markets. The ongoing cycle, initiated in 2022, closely mirrors the patterns observed in the preceding ones.
