JPMorgan issues bitcoin price failure warning after bitcoin sudden sale

Bitcoin, after roaring in December and New Year, suddenly stagnated.

The price of bitcoin reached $ 42,000 per bitcoin earlier this month, double its 2017 record, but has struggled to maintain momentum, dropping to around $ 36,000 (even with smaller cryptocurrencies making massive gains).

Now, with bitcoin trading sideways, analysts at Wall Street giant JPMorgan

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have warned that there may be an exodus of investors unless bitcoin recovers its $ 40,000.

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Unless bitcoin is able to “burst” above $ 40,000 soon, trend-following investors can start to profit, JPMorgan analysts wrote in a note released by Bloomberg for the first time.

Bitcoin investors looking to make a profit from the huge bitcoin price boom “may propagate last week’s correction” and “momentum signals will naturally decline from here until the end of March,” warned the team of analysts.

The price of bitcoin has amounted to almost 300% since October, increasing as institutional investors get excited about cryptocurrency and payment giants like PayPal

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Many institutional investors seeking exposure to bitcoin have accumulated in the Grayscale Bitcoin Trust last year. In the last quarter of 2020, the grayscale raised $ 3.3 billion in its cryptocurrency investment vehicles, a record for the digital asset manager. Its popular Grayscale Bitcoin Trust raised an average of $ 217 million every week for the last three months of the year.

JPMorgan warned that this pace will need to be maintained and even accelerated in order for the price of bitcoin to exceed $ 40,000.

“The flow to the Bitcoin Trust in shades of gray would probably need to sustain its pace of $ 100 million a day for the next few days and weeks for this break to occur,” according to strategists at JPMorgan.

But that perhaps conservative estimate of demand, with Michael Sonnenshein, the newly appointed gray-scale chief executive, revealing over the weekend that the company raised more than $ 700 million just on Friday, tweeting “momentum from the fourth quarter appears to accelerate for the new year.”

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Elsewhere, other observers of the bitcoin and crypto market, still dizzy with the big rise in bitcoin in December, remain quite optimistic.

“Bitcoin has failed to break the $ 40,000 limit again, remaining within a corrective scenario,” said Alex Kuptsikevich, senior financial analyst at FxPro, in e-mail comments.

“However, the support level of around $ 35,000 has not been broken and the crypto market participants are not panicking. In early 2021, the focus will be on renewing big capital investment, as well as volumes PayPal and other big companies that announced their interest in the cryptocurrency market. “