Bank of America Says No Crypto Winter, Citing Develpper Activity and User Growth
Bank of America analyst Alkesh Shah wrote to investors that user adoption of cryptocurrencies and growth in the development activity mean a crypto winter is not likely at this time.
While that was promising news, the analysts also mentioned a “lack of directional commitment” in crypto markets. He also pointed out that the headwinds created by Federal Reserve tightening and macroeconomic forces could limit upside potential in the coming months.
Those headwinds are being seen in exchange inflows for Ethereum, and buying on dips in Bitcoin appears to be muted.
Stablecoins are seeing muted exchange inflows in the past week. Data indicates that exchange inflows of the top three stablecoins was down 99% versus the previous week, which is a positive sign for the broader cryptocurrency markets.
Overall it appears that cryptocurrency investors are largely waiting on the sidelines and biding their time, given the current macroeconomic situation.
The analyst concluded his note saying that it could be difficult for markets to break out of their current trading range until concerns over inflation and the potential for a recession are discounted.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.