Bitcoin has suddenly come to a halt after roaring through December and the New Year.
Bitcoin price reached $ 42,000 per bitcoin earlier this month, doubling from its 2017 high, but struggling to maintain its momentum, falling to around $ 36,000 (even as smaller cryptocurrencies make massive gains).
Now, as bitcoin is trading sideways, analysts at Wall Street giant JPMorgan
JPM
Bitcoin price has been trading sideways for the past week, having recently moved higher … [+]
NurPhoto via Getty Images
Unless bitcoin can “break out” above $ 40,000 soon, trend following investors could start cashing in, JPMorgan analysts wrote in a note first reported by Bloomberg.
Bitcoin investors looking to profit from bitcoin’s massive price surge “could continue last week’s correction” and “momentum signals will of course diminish from here until the end of March,” the analyst team warned.
Bitcoin price has added a whopping nearly 300% since October, rising as institutional investors warm to the cryptocurrency and payment giants like PayPal
PYPL
Many institutional investors looking for bitcoin exposure have piled into the Grayscale Bitcoin Trust for the past year. In the last quarter of 2020, Grayscale raised $ 3.3 billion through its cryptocurrency investment vehicles, a record for the digital asset manager. The popular Grayscale Bitcoin Trust raised an average of $ 217 million per week in the last three months of the year.
JPMorgan warned that this pace must be maintained and even accelerated before bitcoin price bounces back above USD 40,000.
“The flow to the Grayscale Bitcoin Trust would likely need to maintain the pace of $ 100 million a day for the next days and weeks for such a breakout to occur,” said JPMorgan strategists.
But that perhaps conservative estimate of demand, with Michael Sonnenshein, Grayscale’s newly appointed Chief Executive, revealing over the weekend that the company had raised more than $ 700 million on Friday alone, tweeting “The momentum from Q4 seems to be accelerating into the new year.”
Bitcoin’s massive price surge in 2020, which pushes bitcoin well above its 2017 high of $ 20,000, has … [+]
Coinbase
Elsewhere, other bitcoin and crypto market viewers, who are still giddy from bitcoin’s massive December rally, remain generally optimistic.
“Bitcoin failed to break the $ 40,000 threshold again and remained within a corrective scenario,” Alex Kuptsikevich, senior financial analyst at FxPro, said in email comments.
Nevertheless, the support level of around $ 35,000 has not been broken and crypto market participants are not panicking. In early 2021, the focus will be on re-investment of large capital, as well as the volumes of PayPal and other large companies that have announced their interest in the cryptocurrency market. . “