Photographer: Chris Ratcliffe / Bloomberg
Photographer: Chris Ratcliffe / Bloomberg
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Bitcoin retreated beyond the $ 40,000 level on Monday, a decline that could predict more losses based on the latest analysis of strategies by JPMorgan Chase & Co.
The cryptocurrency could be affected by an exodus of investors following the trends, unless it can “burst” over $ 40,000 soon, said a team that includes Nikolaos Panigirtzoglou. The demand model for Bitcoin futures and the $ 22.9 billion Grayscale Bitcoin Trust will help determine they added.
“The flow into the Grayscale Bitcoin Trust should probably keep pace at $ 100 million a day in the days and weeks to come for such a breach to take place,” strategists wrote in a note on Friday.
Traders looking for clues about investors’ appetite for risk were caught by the stunning Bitcoin rally and the turbulent 12% from a record of nearly $ 42,000 on January 8th. pandemic – as well as concern that some of these gains may prove unsustainable.
JPMorgan strategists said that Bitcoin is in a similar position in end of November, except for $ 20,000 as a test. Institutional investment flows in Grayscale’s trust have helped the world’s largest cryptocurrency expand its rally, they wrote.
Traders following the trends “could spread last week’s correction” and “momentum signals will naturally decline by the end of March” if the price of Bitcoin fails to exceed $ 40,000, they said.
Bitcoin fell about 4 percent to $ 35,100 starting at 1:14 p.m. in Tokyo on Monday. Ether, another popular digital currency, fell 5% to $ 1,200.
Exactly what led to the almost quadrupling throughout the year in the price of Bitcoin remains troubled. Commentators cited day traders, wealthy buyers, hedge funds, companies and even signs of long-term investor interest, such as insurers.
Supporters of Bitcoin claim that it is maturing as a cover for the weakness of the dollar and the possibility of faster inflation in a recovering global economy. Others say that its defining feature remains speculative growth followed by busts.
– With the assistance of Mark Cranfield
(Updates with the latest price changes from the first paragraph.)