The Bitcoin market began to “recover” after a pullback from an all-time high, analysts at JPMorgan said. Despite the fact that Bitcoin is still far from the highs, cryptocurrencies are gradually recovering from the crash.
JPMorgan strategists have identified short-term risks that could be causing the Bitcoin price to still “hover” at $ 30,000 this weekend.
After going through several adjustments over the past two weeks, the Bitcoin price is still hovering around the $ 30,000 mark with little to no breakout.
A group of JPMorgan strategists identifying short-term risks temporarily set a challenging price level for Bitcoin.
According to the JPMorgan team, blockchain data shows that investors are selling cryptocurrency to cover their losses to some extent. And it is likely that “many positions still need to be liquidated through the market”.
Agreeing with the above opinion, David Grider, Lead Digital Asset Strategist at Fundstrat, encourages investors and traders to exercise caution and think about ways to mitigate the risk of transactions.
However, the JPMorgan strategist group also believes there are positive signals in the future from the stability of the cryptocurrency market. In addition, the cost of producing Bitcoins could increase as China pushes its mining operations overseas.
Some researchers have argued that marginal production costs play an important role in the price of Bitcoins.
“The crypto market remains problematic, but it looks like it is also starting to recover”, the JPMorgan team said.
David Greder noted that Bitfinex currently has a large number of short orders – short positions are opened. The last time there was a similar phenomenon, negative news from China led to a sharp drop in the price of Bitcoin.
However, for example, JPMorgan strategists called the lack of activity in the futures market “a positive factor”. According to ByBt, after the fall in the price of Bitcoin on May 19, the futures market stopped giving in to volatility. At the time of this writing, the total open interest in Bitcoin futures is $ 11.4 billion.
However, the short-term outlook, according to strategists, is extremely “difficult”. In particular, experts refer to on-chain data. They confirm that traders were selling coins to cover losses. Analysts also believe that there are still “underwater positions” in the market.
What levels should Bitcoin reach for a complete “healing”?
Bitcoin recently dropped more than 6% to $ 30,150 on Saturday, after which it recovered slightly and is now trading around $ 34,400. Other coins are also under strong pressure, with ether falling more than 5%.
However, it is unclear what level Bitcoin must reach for a complete “healing”.
Earlier, JPMorgan predicted a further drop in Bitcoin. For example, the bank said that the fair value of Bitcoin in the medium term is estimated in the range of $ 23,000 to $ 35,000. Moreover, experts believe that the upcoming sale of shares of the Grayscale Bitcoin Trust will increase pressure on the price of the cryptocurrency.