Coinbase reported that Ethereum ETF speculation contributes to increased volatility in the crypto market. The crypto exchange expects price action to remain choppy in the third quarter of 2024 as the market grapples with uncertain narratives.
According to a recent Coinbase report, the crypto market is struggling to determine whether potential spot Ethereum ETF flows will have a bullish or bearish impact. This uncertainty and concerns about a potential U.S. recession are causing retail investors to hesitate in entering new positions.
The third quarter began on a bearish note, with indiscriminate Bitcoin selling from price-insensitive sources putting pressure on the market. The German government’s Bundeskriminalamt (BKA) has been selling seized Bitcoin since June 19, averaging $85 million per day. While this amount is relatively small compared to daily BTC spot volumes of $10.6 billion. The unnerving nature of these sales has impacted the market.
Arkham Intelligence data indicates a positive trend as the BKA’s selling activity appears to be tapering off. With holdings decreasing from about 50,000 BTC in mid-June to less than 5,000 BTC by July 11, it suggests that market disruptions from this source could soon fade.
Effects of Mt. Gox repayments on crypto market sentiment
The Mt. Gox Rehabilitation Trust repayments, began on July 5, added to the existing market uncertainty. The impact of these repayments on actual selling pressure remains unclear. However, the uncertainty surrounding the repayment process is proving to have a more detrimental effect on market sentiment than the selling activity itself.
Looking ahead, Coinbase foresees ongoing turbulence in the market in Q3 2024. The anticipated volatility stems from the absence of compelling narratives and the ongoing discourse on potential Ethereum ETF impacts. Despite this unpredictability, there is potential for unexpected gains, especially for Ethereum.
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