Photographer: Chris Ratcliffe / Bloomberg
Photographer: Chris Ratcliffe / Bloomberg
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Bitcoin retreated above the $ 40,000 level on Monday, a decline that could portend further losses according to the latest analysis by JPMorgan Chase & Co. strategists.
The cryptocurrency could be hit by an exodus of investors following trends, unless it can soon “explode” above $ 40,000, said a team that includes Nikolaos Panigirtzoglou. The demand for Bitcoin futures and the $ 22.9 billion Grayscale Bitcoin Trust will help determine the perspectives, they added.
“The flow to the Bitcoin Trust grayscale is likely to have to maintain its $ 100 million daily rate over the next few days and weeks for this breakout to occur,” strategists wrote in a note Friday.
Traders looking for clues about investor risk appetite have been hit by Bitcoin’s impressive rally and turbulent 12% drop from a record nearly $ 42,000 on January 8th. the pandemic, as well as the concern that some of these gains may prove unsustainable.
JPMorgan strategists said Bitcoin was in a similar position to in late November, except with $ 20,000 as proof. Institutional investment flows toward grayscale confidence helped the world’s largest cryptocurrency expand its concentration, they wrote.
Traders following the trend “could propagate last week’s correction” and “signals for the time being will naturally decline from now until the end of March” if the price of Bitcoin does not exceed $ 40,000, they said.
Bitcoin fell about 4% to $ 35,100 as of 1:14 p.m. in Tokyo on Monday. Ether, another popular digital currency, tossed 5% to $ 1,200.
Exactly what led to almost quadrupling the price of Bitcoin throughout the year remains murky. Commentators have cited day traders, wealthy buyers, hedge funds, companies and even signs of long-term investor interest such as insurers.
Proponents of Bitcoin argue that it is maturing as a hedge for the weak dollar and the possibility of faster inflation in a recovering global economy. Others say its defining feature remains the speculative boom followed by busts.
– With the assistance of Mark Cranfield
(Updates with the latest price movements in the first paragraph.)