While writing this article, Bitcoin (BTC) is facing heavy resistance near $55,000. After the numero uno crypto fell by $8,400 on Sunday, it no longer receives the same support from bulls as earlier.
Against the backdrop of weakening momentum, JP Morgan has cautioned that the digital asset will continue to trade under $60,000 for a long period of time than most investors would anticipate.
Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase, has opined that Bitcoin’s rally has come to a halt following the record liquidation in the futures market last week. Even though, it is a regular happening, the analyst has identified a disparity.
Earlier huge liquidations, which has happened thrice, was an outcome of aggregate flow impulse the triggered a sharp rebound above major support levels in Bitcoin’s price.
Over the past few days, Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November. Momentum signals will naturally decay from here for several months, given their still-elevated level.
While writing this article, Bitcoin was trading at $54,349, down 1.8% in the last 24 hours. In the latest instance, after Bitcoin dropped below $60,000, there was no attempt to retest that level again. It has turned into a major psychological level for the digital asset and firm cross-over will spark fresh buying.
The analyst cautioned “Whether we see a repeat of those previous episodes in the current conjuncture remains to be seen. The likelihood it will happen again seems lower because momentum decay seems more advanced and thus more difficult to reverse. Flows into Bitcoin funds also appear weak.”
Even though JPMorgan has issued a bearish note on Bitcoin, other market analysts have an optimistic view of Bitcoin. One of the main reasons for the price crash on Sunday was the steep decline in the hash rate of Bitcon mining network.
Additionally, the stock dumping by Coinbase executives is also blamed for the Bitcoin’s nose dive on Sunday. Both news reports have caused the FUD that triggered the selloff.
In addition to the above, there were some positive developments in the crypto sector. PayPal’s subsidiary Venmo has started facilitating its 75 million plus users to trade Bitcoin and few more major cryptos. The minimum amount of purchase is stipulated to be $1, implying that it will fuel a major mass adoption.
Furthermore, only a day before, Reuters has stated that the Canada’s cryptocurrency management company 3iQ has obtained regulatory approval to launch a Bitcoin Fund under the ticker QBTCu.TO on Nasdaq Dubai.
3iQ has pointed out that the initiative was taken after receiving consistent enquiries from that region for a regulated product offering based on Bitcoin. That makes the product a dual listed fund as it got listed on the Toronto Stock Exchange a month back. The fund is currently managing assets worth $1.50 billion.
It should be noted that Bitcoin’s long-term price trend continues to remain bullish. However, in the near-term, the king of crypto remains range bound. Any major market news could spark a new round of buying/selling.
