Since spot Bitcoin exchange-traded funds (ETFs) began trading on January 11, the price of bitcoin (BTC) has sharply declined. News of Grayscale Bitcoin Trust (GBTC) redemptions sparked the load-shedding operation, but JPMorgan, an investment bank, predicts that things may soon change.
Is Bitcoin Bottoming Out? JPMorgan Hints at Price Recovery
JPMorgan, an investment firm, predicts that the price of bitcoin will see only modest declines going forward. This prediction is based on the notion that the profit-taking on GBTC has essentially ended.
The bank admits that since spot BTC ETFs were live, the value of BTC has decreased by more than 20%. The study released on Thursday ascribes the decline in the price of Bitcoin to investors who bought the fund at a discount, reaping profits in GBTC.
“We conclude that GBTC profit-taking has largely already happened, given that $4.3 billion has already been extracted from GBTC,” stated Nikolaos Panigirtzoglou, managing director of JPMorgan. “This would suggest that we should be largely past the majority of the downward pressure on bitcoin from that channel.”
Prospects for Bitcoin prices as JPMorgan claims they have peaked
The 100-day Simple Moving Average (SMA) around $39,458 has supported the price of bitcoin from Monday’s low of $39,431. The Relative Strength Index (RSI), which is going horizontally, indicates that the bulls are stalling a potential decline.
Nevertheless, the RSI’s position below the 50 midline, which indicates weak price strength, is worrisome. The Moving Average Convergence Divergence (MACD), which is situated in negative territory below its signal line (orange band), emphasizes the bears’ advantage. These signs support the bearish outlook for the Bitcoin market, which the Awesome Oscillator (AO) in negative territory further emphasizes.
The price of Bitcoin may drop past the 100-day SMA at $39,458 due to increased selling pressure. It might go further lower, reaching the $37,800 support, below which the drains would open and cause Bitcoin to continue falling, all the way to the 200-day SMA at $33,623.
In a worst-case scenario, the price of Bitcoin might psychologically reach $30,000. A move like that would represent a 25% decline from the present levels.
On the other hand, if the 100-day SMA continues to act as support, the price of bitcoin may rise and surpass the 50-day SMA at $42,931. It might also break through the $43,750 roadblock prior to making a move into the parallel channel that is rising.
In a very bullish scenario, the price of Bitcoin might surpass the resistance confluence between the channel’s midline and the crucial $48,000 barrier, putting the $50,000 psychological level—which is 25% above the present price—into focus.