Bitcoin at Risk below $40,000, Says JPMorgan Strategists
Bitcoin’s failure to jump above $40,000 may result in a correction, according to JPMorgan’s strategists including Nikolaos Panigirtzoglou. The report also outlined the importance of Grayscale’s Bitcoin Trust for the future of the world’s largest cryptocurrency.
Panigirtzoglou said that the trend-following traders can trigger a drop in BTC price if Bitcoin fails to regain the $40,000 price level. He added that the leading digital currency was in a similar position in November last year with $20,000 as a price barrier but institutional money in December helped Bitcoin jump above the $20,000 level.
“The recent price action shows that the trend-following traders could propagate the last week’s correction and momentum signals will naturally decay from here up till the end of March if Bitcoin’s price fails to break above $40,000,” the strategists said in the report.
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Institutional Money and Bitcoin’s Price
JPMorgan’s strategists have outlined the importance of institutional money inflows for the future of Bitcoin. In the latest report, they said that the inflows in Grayscale’s BTC Trust will provide hints about the outlook of the cryptocurrency. “The pattern of demand for Bitcoin futures and the Grayscale Bitcoin Trust, the largest traded crypto fund, will provide clues about the outlook. The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur,” the official note states.
After a massive rally during the first 10 days of 2021, Bitcoin has seen price consolidation during the last few days as the price remained between $35,000 and $38,000. The crash in the last week removed nearly $200 billion from the cryptocurrency market as the total market cap of digital currencies dropped from $1.1 trillion to as low as $890 billion. The market has recovered since then as the total market cap is now hovering around $1 trillion. According to a cryptocurrency analytics company Skew, the BTC volatility dropped significantly during the last week due to range-bound trading.
Published at Mon, 18 Jan 2021 08:55:09 +0000 Bitcoin at Risk below $40,000, Says JPMorgan Strategists