Coinbase analysts name problems that will stop further growth of bitcoin

Coinbase analysts said that the growth of the cryptocurrency market is limited by macroeconomic and technical factors. Despite bitcoin reaching a new all-time high of $ 72,000, the market has faced obstacles that may limit its further growth in the short term.

Forced closures of short positions, which used to be the main driver of bitcoin’s price growth, have exhausted themselves, analysts at the Coinbase cryptocurrency exchange wrote. However, according to them, spot bitcoin ETFs in the United States continue to create significant demand for bitcoin.

In its report, Coinbase notes that the decline in cash reserves of fund managers, as well as portfolio rebalancing at the end of the quarter, may limit liquidity in the market. Another factor limiting further growth of the GTS may be the curtailment of the US Federal Reserve’s bank support program.

on March 11, the Fed terminated the Bank Term Loan Facility Program (BTFP), which was used to support the country’s regional banks. This may lead to the closure of arbitrage opportunities for banks, but it may also increase the vulnerability of the financial system.

Due to these factors, Coinbase believes that the most likely scenario is that bitcoin will trade in a narrow range until the halving, which is due in April.

BlackRock’s Bitcoin ETF remains the leader in terms of inflows to exchange-traded funds for the flagship cryptocurrency. Since the launch of IBIT’s Bitcoin spot exchange-traded fund managed by BlackRock in early January 2024, the value of assets under management has reached $ 13.5 billion.