Mikkel Rosenvold
25 weeks ago

Crypto Market Surge Defies Bearish Forecasts, Says Analyst Mads Eberhardt

Despite a bearish outlook from Steno Research, Bitcoin and Ethereum rallied over the weekend, driven by optimism surrounding improved liquidity conditions.
Photo by 24K-Production / DepositPhotos
Photo by 24K-Production / DepositPhotos

Last weekend witnessed a surge in the prices of Bitcoin and Ethereum, defying a bearish outlook by Steno Research. Bitcoin rallied by 8%, and Ethereum by 6%, before both cryptocurrencies settled slightly lower. Mads Eberhardt, a crypto analyst at Steno Research, notes that although their bearish stance has been challenged by this unexpected rally, their core arguments remain intact.

Eberhardt attributes the surge to market anticipation of improved liquidity conditions, with investors factoring in expected enhancements over the weekend. However, he maintains that these liquidity improvements are still months away, reinforcing his continued bearish position. Eberhardt elaborates: "The market conditions that shaped our initial forecast have not changed significantly."

Eberhardt suggests that a shift in their position would require substantial weekly inflows into Bitcoin and Ethereum ETFs, or the approval of a U.S.-based Ethereum spot ETF. Currently, the market presents limited opportunities outside of imminent liquidity growth. "We see no compelling narratives and low activity on Ethereum," he adds, highlighting recent data that suggests flat transaction fees.

Despite venture capital investments in crypto surpassing $1 billion in April, Eberhardt remains cautious about the broader outlook. Institutional investors have also shown interest in Bitcoin ETFs, with BlackRock working to educate pension and wealth funds on their benefits. However, these efforts remain long-term, and analysts like Eberhardt believe that institutional involvement won't yield an immediate impact.

In regulatory news, SEC Chair Gary Gensler faces accusations of misleading Congress on Ethereum's classification as an unregistered security. While this issue remains unresolved, it highlights the uncertainty surrounding the crypto market's regulatory future.

Eberhardt underscores the challenges of increasing trading volumes for Hong Kong's recently launched Bitcoin and Ethereum ETFs, which have shown underwhelming results in their initial trading sessions. The net flows of exchange-traded products globally also reflect mixed sentiment among traditional investors.

The weekend's unexpected rally in Bitcoin and Ethereum, despite a bearish forecast, seems rooted in optimism over liquidity conditions. Nevertheless, Mads Eberhardt maintains his caution, noting that anticipated liquidity improvements are still far off. Until significant inflows are observed or regulatory clarity emerges, Steno Research advises maintaining a careful stance on the crypto market.

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

19 weeks ago Analysis: New Debate Rules Favor Biden New rules announced for the June 27th debate between Joe Biden and Donald Trump serves the President well.
19 weeks ago StanChart Becomes Among the First Global Banks to Launch Spot Crypto Trading StanChart breaks new ground by launching spot trading for Bitcoin and Ether, leading the charge among global banks in the cryptocurrency space.
19 weeks ago Crypto, Currently: June 21, 2024 - Market Bears Down on Major Cryptos Daily update on the five cryptocurrencies, we consider the most interesting right now.
19 weeks ago FX Daily: June 21, 2024 – Forex Market Update Daily update from the foreign exchange markets.
19 weeks ago Amazon Plans To Make Largest Reduction of Plastic Packaging in North America To Date Amazon's response to mounting criticism over its plastic waste with a new reduction plan.
19 weeks ago Ex-OpenAI Chief Scientist Ilya Sutskever Launches New Company Amid Criticism of ChatGPT Parent's Board Appointments Ilya Sutskever, former chief scientist at OpenAI, has co-founded a new company, Safe Superintelligence Inc., amidst ongoing scrutiny of OpenAI’s recent board appointments.
19 weeks ago FX Daily: June 20, 2024 - Mixed Movements in Global Currency Markets Daily update from the foreign exchange markets.