For analysts at JPMorgan bank, the signals are negative regarding the future trend of Bitcoin. The cryptocurrency needs to get back to the $60,000 mark very quickly or it will start a downward trend.
The chief investment officer of the institutional Guggenheim is concerned. And as of early 2021, Scott Minerd predicts a potential negative trend for Bitcoin. “I think we could go back to $20,000 or $30,000 on Bitcoin, which would mean a 50% decline. “
Several other voices on Wall Street are also noting negative signals. This is notably the case of the managing director of Tallbacken Capital Advisors. “From a purely technical standpoint, the uptrend appears to be in serious jeopardy in the near term,” writes Michael Purves in a note.
Bitcoin has, however, already alternated periods of strong rises and very consistent falls in 2021. The most recent was over the weekend of April 17-18. This episode seems difficult to justify and is mainly due to a panic among investors following rumors and a drop in the hash rate.
A return to confidence and therefore to the upside is therefore not to be excluded. In previous episodes of decline, “buyers came back in time to avoid deeper collapses,” Bloomberg said, citing a note from JPMorgan Chase & Co.
“In recent days, Bitcoin futures markets have seen an abrupt sell-off, similar to mid-February last year, mid-January last year or late November last year,” they observe. But the comparison could end there.
Indeed, the investment bank’s analysts are more pessimistic now. In their note to investors, they therefore believe that a quick return above $60,000 is necessary to prevent a more significant decline in the price of BTC.
In previous episodes, the general investment trend proved strong enough to allow Bitcoin to return promptly to key thresholds. On this basis, traders took new positions.
If the same conditions do not occur, the bank’s analysts believe that Bitcoin’s upward momentum could be broken. Moreover, this recovery is already taking time to take place.
The deterioration in momentum appears to be more advanced and therefore more difficult to reverse, Bloomberg reports. Flows into Bitcoin funds also appear to be weak, JPMorgan strategists say.
Bottom line: if Bitcoin fails to break through its short-term trend line, it could fall further and test the $50,000 level. This would mean a further decline for BTC of about 8-10%.