Crypto at risk of macro pressure with no catalysts, says Coinbase

Citing the lack of specific catalysts, Coinbase Research analysts predict that macro pressures will dominate the cryptocurrency market in the next few weeks.

The crypto market appears to be quite focused on macroeconomic events, according to a recent report from Coinbase Research. The report suggests that the market’s dependence on broader economic factors has intensified, with no immediate catalyst in sight to reverse the trend.

In a research report dated August 9, Coinbase analysts attributed the Bank of Japan’s recent rate hike to a reversal of yen carry that has been affecting global markets. Additionally, rising tensions in the Middle East have “many investors” on edge about geopolitics, particularly concerns around “oil supply.”

Cryptocurrencies remain dependent on macro factors

In addition to the macro pressure, the report notes that the cryptocurrency market was further destabilized by a major liquidation event on August 4. In that event, over $1 billion worth of perpetual contracts were wiped out in 24 hours, making it the largest such event since March.

USDC borrowed volume on Aave V3 | Source: Coinbase Research

While this mass liquidation has led to cleaner market positioning, analysts said liquidity “remains limited” and leverage in on-chain spot markets (as measured by stablecoin borrowing amounts) has decreased significantly. “Given the absence of specific catalysts for crypto over the next few weeks, we think macro dominance is likely to continue,” Coinbase Research analysts wrote.

Looking ahead, Coinbase is taking a “defensive approach” for Q3, predicting that macroeconomic factors will continue to drive cryptocurrency price action, with upcoming U.S. inflation data in particular likely to influence market sentiment.

However, not all analysts share this perspective. Grayscale Research, for example, recently suggested that if the U.S. economy achieves a “soft landing” and avoids a recession, token valuations could recover and Bitcoin (BTC) could possibly return to “all-time highs later this year.”