Analysts speculate multiple triggers could disrupt the recent inertia seen in the crypto market, drawing attention to potential shifts like the launch of spot Bitcoin exchange-traded funds, PayPal’s new stablecoin, and an upcoming Ethereum system upgrade.
Staring into the first months of 2023, Bitcoin and other cryptocurrencies have displayed some recovery from the preceding months of 2022. Yet, general lethargy has dominated the past five months, labeled as “lackadaisical” by Mike Novogratz, Galaxy Digital CEO, in June. But some analysts hold a different viewpoint, envisioning certain catalysts that may rekindle enthusiasm in the crypto market.
For instance, Henrik Andersson, Chief Investment Officer at Apollo Crypto, raised his anticipation for the possible approval of spot Bitcoin ETFs within the coming half-year span. He voiced his continued faith in increasing institutional acceptance of cryptocurrency, hinting at the end of the “macro tightening” period to Cointelegraph. Banks globally seem to halt rate hikes, suggesting an end to the hiking cycle, the implications of which are yet unseen. Andersson also noted the prospect of PayPal’s new stablecoin—the nascent currency’s introduction might be a substantial indicator of future crypto adoption. Other prospective catalysts lurk not too far in the future—for example, the prospects of social media giant Twitter incorporating crypto payments cannot be dismissed.
On the other hand, Markus Thielen, Matrixport’s head of research, has placed his bets on spot Bitcoin ETFs and an upcoming Ethereum upgrade. Ethereum’s anticipated EIP-4844 upgrade, slated for Q4 2023, targets to introduce a novel mechanism—proto-danksharding. This could effectively cut down on transaction fees and potentially boost transaction throughput, both of which could be a game-changer for the industry.
In the shorter term, the Federal Open Market Committee schedule may be beneficial, per Singapore-based trading firm IG’s market analyst, Tony Sycamore. He suggests that investors keep their eyes on the Federal Reserve’s last meeting minutes, especially for Bitcoin, because of its influence on US stock markets and their consequential effects on stabilization after the Nasdaq’s second consecutive losing week. This correlation to the interest rate market must also be considered since yields have closed higher in each of the past four weeks.
Bitcoin prices have notably swayed within a $6,000 channel since mid-March—hitting resistance just above $31,000 four times, while support has held steady at $25,000. Existing market conditions indicate a record low in volatility due to decreased liquidity and volumes—a state of dormancy that analysts predict these upcoming catalysts might awaken in the crypto markets.