bitcoin (btc) and ethereum (eth) are currently following a similar pattern to previous years, during which their prices increased by 500% and 1000%, respectively, according to the latest research report from Coinbase Research and Glassnode.
The observation draws parallels between the current cryptocurrency market cycle and the period from 2018 to 2022, characterized by substantial price increases in both cryptocurrencies.
The Potential Impact of the bitcoin Halving on crypto Markets
Analysts crypto-Markets.pdf” data-wpel-link=”external” target=”_blank”>stand out various cyclical metrics, such as net unrealized gains/losses and bid-on-earnings, which reflect past trends. These metrics indicate that the current state of the cryptocurrency markets does not reflect the euphoric conditions seen during the 2023 peak. They suggest that there could still be potential for the market to experience further increases.
Despite acknowledging the potential positive impact of the upcoming bitcoin halving, Coinbase Research remains cautious.
The paper noted a lack of strong supporting evidence and characterized the relationship between the halving and market performance as somewhat speculative.
The research notes that, with only three halving events historically, there is no fully established pattern, especially considering that previous events were influenced by factors such as global liquidity measures.
The next bitcoin halving, expected to occur in April 2024 based on current mining rates, will reduce the block reward from 6.25 to 3.125 btc.
Analyzing the ethereum market and its next update
In 2023, the price of ethereum (eth) rose over 90%, driven by several factors such as the success of the Shapella upgrade and the increasing likelihood of crypto spot ETF approval. These developments encouraged market participants, contributing to the rise in eth value.
Looking ahead, analysts are focusing on the next ethereum upgrade called Cancun. It is expected to improve scalability and security to make layer 2 transactions as cost-effective as possible.
The successful implementation of Cancun could potentially lead to a significant increase in the number of transactions processed on the ethereum network.
Coinbase analysis notes that bitcoin and ethereum have gone through two cycles, spanning bull and bear markets. The current cycle, which began in 2022, faithfully reflects the patterns observed in previous ones.
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