Investors Should Prepare for Prolonged Crypto Consolidation, According to Coinbase

Coinbase Institutional, the institutional arm of the US-based digital asset exchange platform, anticipates further consolidation in the crypto market this quarter.

In their latest research, Coinbase Institutional suggests that crypto traders remain cautious amid concerns about a potential US economic recession.

The outlook hinges on how the Federal Reserve may respond, with potential interest rate cuts seen as either boosting liquidity and retail participation if the economy holds steady, or stalling markets if recession fears materialize.

Looking ahead, Coinbase underscores the uncertainty surrounding the short-term impact of potential approvals for Ethereum (ETH) ETFs.

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However, they view the long-term prospects for ETH positively, suggesting that ETF launches could bolster the altcoin’s market dynamics over time.

In terms of market expectations, Coinbase expects crypto markets to experience heightened volatility in the coming months, particularly in Q3 2024.

They note the absence of strong market narratives, highlighting debates over the potential effects of upcoming ETH ETF flows.

Despite this uncertainty, Coinbase remains cautiously optimistic, predicting a potential for ETH to gain support and potentially outperform as market dynamics evolve heading into late September.

Alexander Stefanov