Coinbase Analysts See Bitcoin Price Downside Easing: Report

The analysts at the largest digital asset trading platform in the United States, Coinbase, have stated that they see the downside pressure on Bitcoin (BTC) and the wider digital asset sector decreasing, which could lead to a safer trading environment for participants.

The report comes at a time when the United States Securities and Exchange Commission (SEC) approved 11 spot BTC exchange-traded fund (ETF) applications, but contrary to popular belief, the price of Bitcoin dropped below $45,000 instead of skyrocketing.

Coinbase Analysts Weigh In

In the report, Coinbase analysts described how certain technical factors that have been causing downside pressure on Bitcoin and the wider digital asset sector are now gradually fading, which might lead to higher prices and better market movement in the coming days.

“Many technical factors pressuring crypto performance to the downside are starting to be exhausted, in our view, which may give way to a more supportive trading environment in the weeks ahead,” the analysts said.

Sale of FTX’s GBTC Holdings

The analysts at Coinbase stated that one substantial event that passed that was causing severe downside pressure on Bitcoin and crypto was the bankrupt crypto exchange FTX’s sale of its substantial GBTC holdings. 

The report highlighted coverage from a reputed media outlet, which stated that the FTX estate had sold over 22 million GBTC shares. On the other hand, Grayscale also got approval to convert its flagship product, GBTC, to a spot Bitcoin ETF on January 10. 

Macro Factors Take Hold: Coinbase Analysts

The Coinbase analysts pointed out in the report that a more supportive trading environment is beginning to develop. The new inflows in the spot BTC ETF industry have averaged over $200 million a day in the past week, bringing the total net inflows to $1.46 billion since January 11.

“Consequently, we expect macro factors to become more relevant for the digital asset class in the weeks ahead, which could be supportive for performance,” the analysts said.

Possibility of Rate Cuts

Finally, Coinbase analysts also pointed out that there is a strong chance of a soft landing for the economy of the United States after the Fed’s most recent rate hike cycle.

“In the U.S., the likelihood of a soft landing seems higher than it was a few months ago with the economy ostensibly making only minimal trade offs between activity and inflation. Core PCE inflation, the Federal Reserve’s preferred measure of prices, at 2.7% year-on-year is trending in line with their 2% long-run target, and the assortment of recent economic indicators has been fairly resilient,” the analysts said.