Fear after yesterday’s crypto sell-off may be masking a bigger setup: a potential parabolic move. Coinbase’s Head of Institutional Research, David Duong (CFA), says the stage could be set for a powerful rebound in Bitcoin and Ethereum—driven by easier macro policy and accelerating institutional flow. If the next few weeks confirm his two catalysts, traders could see volatility flip from pain to opportunity.

What’s happening

A sharp market drop rattled risk assets, but Duong argues two forces are turning supportive: - A recent 25 bps Fed cut plus a bias toward further easing can improve liquidity and risk appetite. - Rising institutional participation—including digital asset treasuries (DAT)—may deepen order books and stabilize dips.

Why this matters to traders

- Easier policy lowers discount rates, historically boosting high-beta assets like BTC and ETH when growth doesn’t collapse. - Institutional buyers tend to be stickier capital. Their accumulation can compress downside wicks, reduce funding whipsaws, and propel trend moves once resistance breaks. - If corporates and funds expand DAT allocations, recurring buys can act as a structural bid, especially during macro “windows” of lower rates and steady guidance.

The two catalysts to track

• Macro path: Watch the next FOMC guidance, CPI/PCE disinflation trends, labor softness, DXY and real yields. A dovish glide path + contained inflation is the sweet spot.
• Institutional flows: Monitor ETF net inflows, custody balances, OTC desk volumes, and treasury allocation announcements. Sustained positive flows confirm demand beyond retail.

Actionable playbook

• Plan for scenarios: Map a dovish-continue vs. hawkish-surprise path. Predefine entries/exits for both to avoid chasing.
• Use breadth and liquidity signals: Track stablecoin net issuance, perp funding, open interest, and options skew. A rise in stablecoin supply + neutralizing funding often precedes trend continuation.
• Respect volatility: Size smaller into macro events; add only on confirmation (e.g., higher highs after reclaimed levels, declining IV post-event).
• Level discipline: Identify your BTC/ETH invalidation lines before the event. If reclaimed, scale; if lost, cut—no hesitation.
• Follow the flows: Persistent ETF/dark pool/OTC buy prints are your friend; fading them is costly in impulse legs.

Key risks

- A hawkish Fed pivot (hot inflation, tight labor) could reprice rates higher, pressuring crypto multiples. - Thin weekend liquidity can exaggerate moves; use hard stops. - Headlines around regulation or exchange risk can interrupt otherwise bullish flow dynamics.

Bottom line

Coinbase’s Duong sees a credible path to a parabolic advance if macro easing meets real institutional demand. Traders don’t need to predict the future—just prepare for it: define scenarios, follow liquidity, and execute only on confirmation.

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