Crypto Markets Will See More Downtrends in Q2-Q3 2024 : Here’s Why

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Bitcoin and crypto have typically seen average or downward trends in Q2 and Q3 in recent years. With the halving just one day away, mining Bitcoin will become more expensive, so miners might start selling their Bitcoin.

Elja in his X post presents an open view of the current state of the cryptocurrency market, highlighting five key factors that could potentially signal a downturn in Bitcoin and crypto prices.

Let’s delve deeper into these points to gain a comprehensive understanding.

Here’s Why Bitcoin and Crypto Could Go Down in Q2-Q3

BTFP Program Ending

The analyst starts with the closure of the Federal Reserve’s emergency lending program, the Bank Term Funding Program (BTFP). After Signature Bank and Silicon Valley Bank failed, BTFP’s new loans ended, removing significant market liquidity. This decision may have short-term bearish effects, but the Federal Reserve tends to issue more money, which may mitigate the impact.

Delay in Rate Cuts

Next, he discusses rate cut prospects in his X post, which boosts stock and crypto markets. Higher-than-expected CPI statistics and Federal Reserve Chair Powell’s comments regarding protracted interest rates have faded hope of a bullish surge. However, the 2024 rate drop reduction raises concerns, especially for risk-on assets.

Slowing ETF Inflows

Moving ahead, Elja points out a notable shift in cryptocurrency ETF flows, with a decline in institutional interest reflected in slowing inflows. This trend is particularly evident in Bitcoin ETFs, where outflows consistently exceed inflows. Such a decline in institutional participation could signal weakening confidence in the market’s prospects.

Uncertainty from the War Situation

We all know about the ongoing geopolitical tensions between Iran and Israel which many analysts see as an add-on layer of uncertainty in the market. Whereas Elja highlights the potential for significant market fluctuations in response to any statements or actions from either party. Recent market reactions to similar events underscore the significance of geopolitical factors in shaping investor sentiment.

Bitcoin Historical Trend and Halving Impact

Summing up his analysis, Elja says Q2-Q3 has generally been average to bearish for Bitcoin and crypto. With the coming halving, miners may sell more as mining costs increase. Similar to earlier halving cycles of 2016 and 2020, these variables could generally take a few months to settle down.

In conclusion, the analyst advised the investors to stay focused and ready to buy the dip. He said experienced crypto investors view this market stagnation or decline period as an opportunity to buy more assets at lower prices. They anticipate significant future growth, with Bitcoin potentially reaching $150k, Ethereum hitting $12k, and many altcoins seeing gains of 50x to 100x. Do you agree?

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