Coinbase Institutional, a leading cryptocurrency exchange, has issued a cautionary statement regarding the future trajectory of the crypto market as bitcoin reaches new price levels. David Duong, Head of Institutional Research, and David Han, Institutional Research Analyst at Coinbase, highlighted potential macroeconomic and technical factors that could pose challenges for the crypto sector in the coming weeks.
According to Coinbase Institutional, upcoming events such as the expiration of the Bank Term Funding Program by the U.S. Federal Reserve could eliminate arbitrage opportunities for banks, potentially impacting the crypto market. Additionally, concerns about the Consumer Price Index (CPI) report for the previous month, scheduled for release tomorrow, could trigger a pullback in cryptocurrency prices if the data reveals negative surprises.
Moreover, the firm points out the possibility of liquidity being constrained due to quarter-end rebalancing by fund managers, as well as diminishing cash reserves. Despite the anticipation of these challenges, the report notes that the comparison between newly mined bitcoin and ETF inflows may not fully capture the longer-term cyclical supply trends affecting the market.
Despite the cautious outlook presented by Coinbase Institutional, bitcoin’s price has continued to climb higher at the start of this week.