According to a recent report from Coinbase Research and Glassnode, Bitcoin (BTC) and Ethereum (ETH) are currently displaying similar trends as previous years, during which their prices saw significant increases of 500% and 1,000%, respectively.
This observation draws parallels between the current state of the crypto market and the period from 2018 to 2022, which was characterized by significant price surges in both cryptocurrencies.
One factor that analysts are highlighting is the potential impact of the upcoming Bitcoin halving on the crypto market. They point to various cyclicality metrics, such as net unrealized profit/loss and supply in profit, which suggest that the current market conditions are not as euphoric as they were during the peak of 2023. This could mean that there is still potential for further price increases.
While the forthcoming Bitcoin halving is expected to have a positive impact, Coinbase Research remains cautious. They note a lack of robust evidence to support the potential relationship between the halving and market performance, as there have only been three previous halving events and other external factors may have influenced those outcomes.
The next Bitcoin halving is projected to occur in April 2024, and it will reduce the block reward from 6.25 to 3.125 BTC based on current mining rates.
The report also examines the recent market performance of Ethereum (ETH), which saw a 90% increase in price in 2023. This was driven by factors such as the successful Shapella upgrade and the increasing likelihood of approval for spot crypto ETFs. These developments played a role in encouraging market participants and contributing to the rise in ETH value.
Looking ahead, analysts are closely watching the upcoming Cancun upgrade for Ethereum, which is expected to improve scalability and security for layer-2 transactions. If successful, this upgrade could potentially lead to a significant increase in the number of processed transactions on the Ethereum network.
Coinbase’s analysis also notes that both Bitcoin and Ethereum have gone through two cycles, encompassing both bull and bear markets. The current cycle, which began in 2022, closely mirrors the patterns observed in the previous ones.
