Crypto markets likely to remain choppy in Q3, Coinbase analysts say

Analysts at cryptocurrency exchange Coinbase say that the cryptocurrency’s price action is likely to continue on a choppy trajectory throughout the remainder of the third quarter of 2024.

Coinbase’s head of institutional research David Duong and David Han, an analyst at the U.S.-based crypto exchange, shared their forecasts in the company’s weekly market report, predicting more volatility for cryptocurrencies in the next month or two before a possible recovery in the fourth quarter.

JPMorgan analysts also offered a similar bullish analysis with a different timeline, noting that cryptocurrency markets could recover in August.

The third quarter started badly

The cryptocurrency market experienced an uptrend earlier this year, driven by the spot talk of Bitcoin ETFs, with Bitcoin hitting a new record high above $73,000.

However, Q2 saw broader market struggles due to a number of negativities, including interest rate decisions, miners capitulating, and significant sell-offs in government-controlled wallets, and this struggle spilled over into Q3.

“The third quarter started on a sour note with oversupply caused by indiscriminate bitcoin sales from price-insensitive sources. This includes the German government’s Bundeskriminalamt (BKA), which began selling seized bitcoin supplies on June 19,” the analysts wrote in comments published on Friday.

Analysts, noting that Mt. Gox is another factor, say the uncertainty could be more damaging than an actual sell-off.

“For now, we expect price action to remain volatile in Q3 as crypto markets still lack strong narratives,” they wrote.

Analysts are optimistic about Q4

On a positive note, the SEC’s approval of spot ETH ETFs and the recent SOL ETF filings are significant developments. Despite the market’s uncertainty over whether ETH ETF flows will be bullish or bearish, Duong and Han believe the outlook is unlikely to be negative from a “positioning perspective.”

“This could leave room for a surprise outperformance and further support for ETH, even if it takes time for the flows to materialize. But overall, we believe the next two months are likely to produce more volatility before things start to improve more significantly in late September,” the duo added.

Looking ahead to the fourth quarter, possible interest rate cuts and the US elections in November could significantly impact the market.

Regardless of the election results, fiscal expansion could make Bitcoin a strong buy at current levels, especially as an alternative to traditional finance.