The last few weeks have been rocky for Bitcoin and cryptocurrency, with the bitcoin prices swinging at an alarming rate.
After falling to $28,600 per bitcoin on Bitstamp’s Luxembourg-based exchange, the bitcoin price rebounded quickly to over $30,000 and $6,000 within hours. Other top cryptocurrencies like ethereum and Binance’s BNB as well as cardano, dogecoin, Ripple’s XRP, have also fallen sharply. resulting in hundreds of billions of dollars in lost value due to the $1.4 trillion combined crypto market.
Now, After correctly calling the latest Bitcoin and crypto sale-off analysts at Wall Street giant JPMorgan predict that the bitcoin price will fall in the medium term.
“It would still require price drops to the $25,000 mark before longer-term momentum would signal capping,” JPMorgan strategists led Nikolaos Panigirtzoglou stated in a note first reported Bloomberg. They gave bitcoin a fair value of between $23,000 and $35,000 over medium term based on a comparison with its volatility versus that of gold.
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JPMorgan has set a theoretical price target for bitcoin at $140,000. This is based on bitcoin volatility and gold convergence. However, bitcoin is six times more volatile than gold. Accordingly, it should have a fair value of one-sixth (140,000), or $23,000.
Analysts wrote that “despite this week’s correction, we are reluctant to abandon the negative outlook for Bitcoin and crypto markets more generally,” adding that although there had been “some improvement”, our signals remain “overall bearish.”
The main driver of cryptocurrency markets has been Bitcoin. Nearly all the major tokens have been backed by it, including Binance’s BNB and cardano. Ripple’s Ripple’sXRP. Tracking bitcoin’s price movements.
is the second-largest cryptocurrency, after bitcoin. However, ethereum has outperformed bitcoin in the past year. This week, however, bitcoin’s price fell along with ethereum as China cracks down on crypto miners. These people use huge amounts of electricity to validate transactions and secure blockchains.
The bank’s strategists warned that the possible unlocking of shares of the Grayscale Bitcoin Trust, (GBTC), could pose a downside risk to bitcoin prices.
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Analysts at JPMorgan wrote that the selling of GBTC shares after the six-month lockup period in June and July had been a major headwind for bitcoin. Institutional investors can gain exposure to Bitcoin through shares in Grayscale Bitcoin Trust. The trust is the largest manager of digital asset funds and currently holds 650,000 bitcoin tokens – 3% of the total supply.