Bitcoin faces some uncertainty post halving, according to Coinbase

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New Coinbase Institutional and Glassnode research suggests that Bitcoin and Ethereum follow previous multi-year price cycles. Analysts note that metrics such as unrealized profits are mirroring trends from 2018 to 2022, a period marked by a significant surge in the value of these cryptocurrencies.

The report indicates that critical indicators, including net unrealized profit/loss and profit supply, follow past trends. This similarity suggests that despite not exhibiting the euphoria of its 2023 peak, the crypto market may still have the potential for substantial growth.

The Coinbase Research report features Bitcoin’s journey prominently since its last cycle low, highlighting its performance. The study discusses the eagerly anticipated Bitcoin halving event set for April 2024. This event will decrease the block reward from 6.25 to 3.125 BTC, a change that has historically impacted Bitcoin’s value significantly.

However, the report urges caution, calling for more data to establish a consistent pattern from previous halvings and considering external factors like global liquidity measures.

The research also indicates that Ethereum’s upcoming Cancun upgrade aims to reduce layer-2 transaction costs on the network. The analyst expects this upgrade to enhance Ethereum’s scalability and security considerably. Additionally, by focusing on cost efficiency for layer-2 transactions, the Cancun upgrade will likely significantly boost Ethereum’s transaction volume.

Coinbase’s study concludes that the current cycle for Bitcoin and Ethereum, which began in 2022, closely resembles the cycles observed in previous years. Each of these cycles has encompassed bullish and bearish market trends, providing a comprehensive view of the cryptocurrencies’ market behavior over time.

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