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Strategists are struggling to see a coming turnaround for Bitcoin, at least for now, as the digital coin hovers around the $ 30,000 level.
Short-term setup is difficult, ”wrote a team from JPMorgan Chase & Co. including Josh Younger and Veronica Mejia Bustamante on Friday, while Fundstrat Global Advisors LLC, David Grider, recommended reducing risk or buying a protection.
Read also: Is Paraguay ready to give bitcoin legal tender? Don’t bet on it
The JPMorgan team said blockchain data suggests recent cryptocurrency sales were made to cover losses and that there is likely still a surplus of underwater positions that need to be cleared by the market. . “
Bitcoin halved from a peak of nearly $ 65,000 in April, affected by a cryptocurrency crackdown in China, tightening regulatory oversight elsewhere and fears that the servers underlying the virtual coin might consume too much energy. The prospect of a reduction in emergency stimulus measures amid the recovery from the pandemic has also emerged as a possible hurdle for more speculative investments.
Still, JPMorgan strategists have pointed to the stability of the Bitcoin futures market as a positive factor, as well as the possibility of rising production costs as the Chinese crackdown pushes Bitcoin mining overseas. Some researchers argue that the marginal cost of production plays an important role in Bitcoin prices.
So while the cryptocurrency market is showing signs that it is not yet healthy, it also appears to be starting the healing process, ”they wrote.
The largest cryptocurrency fell 6% to $ 30,296 on Saturday after falling nearly 8% on Friday. Other rooms were also under pressure, the Aether dropping by more than 5%. Some chart watchers see the $ 30,000 level as key for Bitcoin, saying a drop below it could pave the way for a pullback to $ 20,000.
Grider, chief digital asset strategist at Fundstrat, noted that a significant short position had again built up on the crypto exchange Bitfinex – and said that the last time there was a similar situation, negative news from China pushed prices down.
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