JPMorgan strategists believe bitcoin could drop further unless it breaks above $40,000.

According to strategists at JPMorgan, Bitcoin could be at risk of a further drop unless the digital coin climbs back above $40,000 soon.

According to the Bloomberg report, JPMorgan Chase & Co. strategists believe that Bitcoin could be at risk of a further drop unless the digital coin climbs back above $40,000 soon. Strategists believe that an exodus of trend-following investors could hurt the leading cryptocurrency unless it can “break out” beyond that price level. The pattern of demand for Bitcoin futures and the Grayscale Bitcoin Trust, the largest traded crypto fund, will provide clues about the outlook, they said.

 

Grayscale inflow would need to sustain a $100 million per day pace. 

“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,” JPMorgan strategists wrote in a note on Friday. Traders searching for clues about investor appetite for risk have been gripped by Bitcoin’s mammoth winning rally and turbulent 11% slide from a record of almost $42,000 on Jan. 8. Since March, the cryptocurrency boom embodies the ebullience in financial markets awash with the stimulus to counter the global pandemic’s impact. It is also a matter of concern that some of these gains may ultimately prove unsustainable.

 

Bitcoin continues to hover around $35,000.

Strategists at JPMorgan said Bitcoin was in a similar position in late November, except with $20,000 as the test. Flows of institutional investment into the $22.9 billion Grayscale trust helped the world’s largest cryptocurrency extend its rally, they wrote. Bitcoin proponents argue that the cryptocurrency is maturing as a hedge for dollar weakness and the possibility of faster inflation as the global economy recovers. Others say its defining characteristic remains speculative booms followed by busts. At the time of writing, the price of bitcoin is trading just above the $35,000 mark

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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