JPMorgan Cautions on Bitcoin Price Amid Institutional Demand Weakness
Bitcoin prices are stagnant as market players await a key announcement from the Trump administration, with significant concerns over price suppression and waning institutional demand. JPMorgan warns of a bearish trend for Bitcoin and Ethereum futures, while analysts suggest a potential drop to $70,000 if current support levels are breached. Amidst investment activity, sentiment in the crypto market has turned negative, indicated by a shift in the fear and greed index.
Bitcoin and cryptocurrency prices have remained stagnant over the past week as traders anticipate a significant announcement from the Trump administration. Currently, the price of Bitcoin is hovering below $100,000, despite its surge following Trump’s election victory. Meanwhile, Elon Musk has raised concerns regarding the U.S. gold reserve, and Samson Mow, a prominent figure in the Bitcoin community, has indicated that the cryptocurrency is experiencing potential price suppression as it approaches a critical technical indicator known as the ‘death cross.’
Recent analysis from JPMorgan highlights declining institutional interest in Bitcoin and Ethereum futures, deemed a negative signal for the short-term outlook of these cryptocurrencies. The bank’s analysts noted that this trend indicates a waning demand from institutional investors who utilize regulated futures contracts on the CME. Additionally, they observed that momentum signals for both Bitcoin and Ethereum have been weakening for several months, with Ethereum showing signs of negative momentum.
Concerns surrounding Bitcoin’s price stability are echoed by other analysts, with some suggesting that it could plunge to around $70,000. Tyler Richey from Sevens Report Research indicated that the ongoing sideways movement in Bitcoin’s price suggests a drift away from previous highs. He emphasized that if Bitcoin’s support level at $91,500 is breached, a potential crash to $73,400 is likely.
The current stagnant price behavior coincides with significant investment activity, including a $436 million acquisition by Abu Dhabi’s sovereign wealth fund in BlackRock’s spot Bitcoin ETF. BlackRock has been instrumental in pushing for the approval of a spot Bitcoin ETF in the U.S., which has led to major advancements in Bitcoin fund availability. Recently, U.S. Bitcoin ETFs reached over $100 billion in net assets, reflecting significant market interest.
However, after a period of strong growth, U.S. Bitcoin ETFs experienced net outflows last week for the first time since early January. Meanwhile, the crypto fear and greed index has shifted into “fear” territory, indicating a decline in market confidence. Alex Kuptsikevich of FxPro noted that the prevailing market sentiment suggests a lack of buying interest from traders looking for counter-trend opportunities, which could signify underlying issues for the market going forward.
In summary, Bitcoin and cryptocurrency markets exhibit signs of stagnation as they await crucial announcements. JPMorgan’s warnings about declining institutional demand highlight a bearish outlook, with significant price drops potentially on the horizon. Continued monitoring of technical indicators and market sentiment is essential for traders and investors navigating this uncertain landscape.
Original Source: www.forbes.com
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