Bitcoin, crypto market to rebound in August, JPMorgan says

by

As an experienced analyst, I’ve seen my fair share of market fluctuations in the crypto space. The recent downturn, with JPMorgan revising down their net flow estimates and predicting a bounce starting in August, is not an unfamiliar pattern.

JPMorgan predicts that the cryptocurrency market will rebound moderately beginning in August. However, they have adjusted their year-to-date total inflows from $12 billion to $8 billion.

Bank analysts have revealed in a research report that they anticipate a decrease in crypto market sell-offs starting this month. This optimistic viewpoint was expressed by the prominent Wall Street firm amidst persistent losses in the crypto sector following a turbulent June.

As a financial analyst, I’ve observed that Bitcoin‘s price experienced a significant surge, reaching a peak of $73,000 back in March. However, the past month has seen a substantial reversal as selling pressure took hold, causing a steep decline in Bitcoin’s value.

Factors contributing to the downturn include miners selling off Bitcoin following the halving-induced reduction in network rewards, as well as a massive sell-off instigated by the German government. The market also showed significant volatility upon hearing about impending repayments from Mt.Gox.

Currently, Bitcoin is priced approximately at $57,330. This represents a decrease of over 13% in the past month. Lately, Bitcoin has been fluctuating close to key support levels. Financial analysts predict that the bearish trend could potentially push the price down towards the $50,000 mark.

JPMorgan revises down net flow estimates

According to JPMorgan’s research update for investors, substantial Bitcoin and crypto market sell-offs are expected to wind down by late July. Following this period, there is a possibility that these digital assets could start recovering and potentially experiencing growth.

JPMorgan has adjusted its net inflow forecast for Bitcoin to $8 billion, showing caution regarding the earlier prediction of $12 billion. According to the bank’s analysis, the digital currency’s price being overvalued compared to its production cost and gold is one of the factors. Additionally, they point out the decline in exchange reserves and broader market selling pressure as significant reasons.

The reason for the decrease in Bitcoin holdings can be explained by several factors. First, there have been numerous liquidations, primarily instigated by creditors from Gemini and Mt. Gox. Furthermore, a large portion of the 50,000 BTC once owned by the German government following the seizure from a piracy site has been sold off in recent weeks.

According to on-chain information, the German government’s cryptocurrency wallet contains around 4,925 Bitcoins, which is equivalent to roughly $283 million at present values. When the German authorities confiscated these Bitcoins from Movie2k, their worth was approximately $2 billion; this value later surged and peaked at around $3.6 billion.

Read More

2024-07-11 20:06