JPMorgan: Bitcoin Has Chance to Continue Decline if Institutions Pump Up
The recent decline in the price of bitcoin allowed to clear the “speculative scale”, but the possibility of a further decline should not be ruled out, Bloomberg writes today citing a report from JPMorgan Chase & Co.
Inertial traders, such as commodity advisors and other funds using quantitative strategies, were likely to play a major role in the decline when they closed long positions in Bitcoin futures, strategist Nikolaos Panigirtzoglu said in a November 27 notice..
“The existing scale on the positions of inertial traders has been largely cleaned up,” he writes, adding that inertial signals will continue to deteriorate unless Bitcoin quickly recovers..
Bitcoin last week climbed to a three-year high of about $ 19,500, after which it rolled back to $ 16,000.Since then, the cryptocurrency has largely managed to win back the fall and return to $ 18,600.
“There is room for inertial traders to push bitcoin further down,” strategists at JPMorgan added. They note that investing in Grayscale’s Bitcoin Trust will play a key role. Their weakening with the simultaneous indecision of inertial traders can pull Bitcoin lower, Panigirtzoglu believes.
“The failure of Bitcoin Trust Grayscale to attract additional inflows over the coming weeks will also raise doubts about the idea that institutional investors such as family wealth management firms have joined the trend or adopted Bitcoin as digital gold, replacing traditional gold as long-term. investment, ”writes JPMorgan.