Crypto Bull Market Still Has Legs

Coinbase analysts stay optimistic for the fourth quarter, arguing that a mixture of resilient liquidity, a good macro backdrop and supportive regulatory alerts might preserve the crypto market rally alive.

Bitcoin BTC$115,543.82, they argue, continues to profit from macro tailwinds and will outperform market expectations, analysts David Duong and Colin Basco stated in a Wednesday report.

“Barring a shock to energy prices we think the immediate risk to disrupting the current U.S. monetary policy path is actually quite low,” the analysts wrote. On-chain demand from digital asset treasuries (DATs) can be anticipated to offer a flooring for costs.

One lingering concern for buyers is seasonality, the report stated, noting six straight September declines for BTC in opposition to the greenback between 2017 and 2022.

But this sample did not play out in each 2023 and 2024, the analysts famous. Not solely that, however the small pattern dimension and broad dispersion of outcomes restrict the usefulness of seasonal indicators.

A extra significant issue, Coinbase stated, is the place we’re within the DAT cycle. Publicly disclosed DATs maintain over 1 million BTC ($110 billion), 4.9 million ETH ($21.3 billion) and eight.9 million SOL ($1.8 billion) as of Sept. 10.

Late entrants are actually chasing altcoins additional down the danger curve, which Coinbase believes places markets in a “player-versus-player” section, a dynamic that favors large-cap tokens however might quickly result in consolidation amongst smaller DAT gamers.

Heading into the ultimate quarter, the change’s analysts maintained a constructive outlook, anticipating sturdy liquidity, a good macroeconomic backdrop and regulatory momentum to maintain crypto markets effectively supported.

Read extra: Crypto Institutional Adoption Appears to Be within the Early Phases: JPMorgan