After the worst May price for Bitcoin (BTC) in the last 10 years, analysts at JP Morgan, America’s largest Bank, have predicted that the largest cryptocurrency is likely to continue to decline in the near future.
Spearheaded by strategist and Bitcoin expert, Nikolaos Panigirtzoglou, in the latest research note to clients, the bank believe that institutional demand is likely to further drag Bitcoin’s price below $30,000.
Based on Bitcoin’s volatility ratio in relativity to gold, the JPMorgan analyst predicted that Bitcoin will continue to trade between $24,000 and $36,000 in the medium term.
“The fair value of bitcoin based on a Bitcoin to gold volatility ratio of around x4 would be ¼ of $145k or $36k. The fair value of Bitcoin based on the current Bitcoin to gold volatility ratio of around x6 would be 1/6 of $145k or $24k. Therefore, we see a fair value range of $24k to $36k in the medium term, ”the note reads.
Panigirtzoglou said that JPMorgan still sees a price mark of $145,000 as a long-term ‘theoretical target’ for the price of BTC, ‘assuming a convergence of Bitcoin’s volatility to that of gold and a matching of bitcoin’s allocations to that of gold in investors’ portfolios.
“$145k is the price of Bitcoin that would match it with private sector gold holdings for investment purposes of around $ 2.7 trillion at the moment. It goes without saying that full convergence or equalization of volatilities or allocations is unlikely for the foreseeable future,” the strategist wrote, adding:
” The long-term signal is still problematic, as it has not yet shortened. Price drops to the $ 26k level would still be needed before longer-term momentum signals a capitulation.”
Panigirtzoglou noted that institutional investors showed a reluctance to buy the dip following the major crypto crash of May 19.
“We note that the mere increase in volatility, especially relative to gold, is an impediment to greater institutional adoption, as it reduces the attractiveness of digital gold versus traditional gold in institutional portfolios,” said the strategist.
Ditch Bitcoin for Gold
JPMorgan also suggested that large institutional investors were ditching BTC in favor of gold, as Bitcoin touched five-month lows near $30,000.
On Monday, Peter Brandt, a veteran trader and financial analyst, questioned whether the price of Bitcoin is likely to rebound in the near future.
At the time of writing, Bitcoin is trading at $36,638, a drop of around 1% in the last 24 hours, according to data from CoinGecko. The cryptocurrency has lost around 37% in the last 30 days, but has still risen 286% over the past year.
JP Morgan have never been supporters of Bitcoin and its contemporaries, with their CEO publicly warning investors off cryptocurrencies as recently as last week.
Bitcoin Stuggling To Break Free
Bitcoin (BTC) continues to struggle in the range between $35,000 and $40,000, with the flagship crypto constantly failing to rally above $40K, which has become an unbeatable resistance.
In the last 24 hours, BTC has oscillated below USD 37K, however, the market has seen a number of factors that form an encouraging scenario for the medium term.
This is seen in the fact that every time a correction occurs in the market, there are a large number of investors who are rushing to sell and withdraw with the profit they can, while others take advantage of the fall to buy even more cryptocurrencies.
In the past week, approximately 30 thousand BTC were incorporated by large investors called whales, so good support has been formed at the current level.
Experts suggest that the great resistance BTC needs to overcome in the short term rests on $40,000. From this point, the leading cryptocurrency will hit new barriers at $45,000 and $50,000, which will undoubtedly mark the return to the bullish path.
The possibility of a new setback remains.
It Could Get Worse Before Better
Analysts around the world seem to share a unanimous belief that there could be even deeper corrections as steep as $25,000. Robert Kiyosaki, author of “Rich Dad, Poor Dad,” is one of those who analyzes this scenario.
“When the price reaches $27,000, I can start buying again. Much will depend on the global macro environment. Remember that the problem is not gold, silver or Bitcoin. The problem is the incompetent in government, the Fed and Wall Street. Remember that gold cost $300 in 2000,” wrote the best selling writer on Twitter.
Altcoins
The rest of the market also had significant returns. Ether (ETH), the benchmark altcoin with a loyal cult following, jumped by more than 11% and was back above $2,600.
Among the two-digit increases, XRP also stood out, with 15%, while Uniswap (UNI) and Chainlink (LINK) shared 12. The tokens are trading at $1.02, $27.38, and $30.54, respectively.
Binance coin (BNB), bitcoin cash (BCH) and litecoin (LTC) grew 7%, and their current price stand at USD 347, USD 704 and USD 183. Finally, Cardano, billed for a profitable June, (ADA) and dogecoin (DOGE) rose more 3% and trade at USD 1.67 and USD 0.31 respectively.