The much-anticipated Bitcoin halving event is expected to be a significant factor in driving up crypto prices, but it faces a major hurdle - the typically weak season for crypto markets and other risk assets, according to cryptocurrency exchange Coinbase.

As per Coinbase's April 5 market commentary report, the crypto market needs to find another story to further boost prices across the board. The BTC halving, scheduled for April 20 or 21, could potentially lead to higher prices, but it must contend with the weakest time of the year for crypto markets.

Data from digital assets research firm Brave New Coin indicates that Bitcoin has generated an average monthly return of approximately 2.7% from June to September since 2011. However, in the other eight months, the average monthly return was around 19.3%.

Coinbase also noted that overall crypto volumes have continued to decline as the market seeks a new narrative to power it higher. Over the past 24 hours, the total crypto volume was $61.78 billion, a 33.25% decrease from the previous day, according to CoinMarketCap data.

Despite the slowing volumes, Coinbase sees signs that indicate the likelihood of an increase in new investors entering the crypto market soon. The increased acceptance of Bitcoin as a form of "digital gold" could drive demand from a new subset of investors in the current market regime.

Bitcoin's dominance in the overall crypto market is currently at 50.6%, according to CoinStats data. The report further explains that those waiting for price declines to invest may find the troughs to be less frequent as more investors get involved.

"As a result, we think dips are likely to be more aggressively bought compared to previous cycles, even as volatility persists during price discovery," Coinbase wrote.

Historically, halving events have been associated with spikes in the price of Bitcoin. Following the previous halving event in May 2020, Bitcoin's price surged from $8,787 during the halving to nearly $69,000 in November 2021.

In other news, the United States Court of Appeals for the Second Circuit recently ruled in favor of Coinbase, confirming that the secondary sales of cryptocurrencies on its platform do not violate the Securities Exchange Act. The plaintiffs had argued that Coinbase was offering and selling unregistered securities, but Coinbase argued that secondary crypto asset sales did not meet securities transaction criteria, disputing the relevance of securities regulations.