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Bitcoin´s determined to consolidate at $20,000 as JP Morgan anticipates the end of cryptowinter

By Noemi Jansana / Alejandra Zamora

Date: Wednesday 06 Jul 2022

Bitcoin´s determined to consolidate at $20,000 as JP Morgan anticipates the end of cryptowinter

(Sharecast News) - The cryptocurrency market recovers $900 billion global capitalization on Wednesday, during the heat of Bitcoin (BTC) and Ethereum (ETH), as they cut Tuesday´s losses and tried to consolidate at $20,000 and $1,100, respectively. Digital assets left a day of high volatility on July 5th, with rises as high as 6% for BTC and 10% for ETH, but which ended up being diluted to the point where the main cryptos turned around and moved into declines.
However, the major tokens seem determined to retain price levels that are considered psychological for the market. There is also a lot of whale activity, that is coming in to hoard coins and there are other signs that make JP Morgan strategists think that the worst of the crypto-winter may be behind us.

Despite a difficult quarter for investors, Nikolaos Panigirtzoglou, strategist and managing director at JPMorgan, sees solid funding and contagion reversals as signs that the cryptowinter may soon be over. "Indicators such as our net leverage metrics suggest that deleveraging is already well underway," he commented. Panigirtzoglou acknowledges the increase in these positions during the bear market.

He also noted that part of the reason for this prediction lies in the fact that other cryptocurrency companies with "stronger balance sheets" are making it a business of theirs to help ensure that "the virus that spread through the bear market is contained." The analyst is referring to the intervention of Bahamian cryptocurrency derivatives exchange FTX in BlockFi's predicament. The exchange helped BlockFi with a $250 million emergency line of credit to help the company "navigate the market from a position of strength."

This forecast is also influenced by the fact that venture capital funding has been largely unaffected by the current market situations. Despite the crypto winter, funding added around $5 billion between May and June.

The bank touches on a really important point in its assertion that funding is still flowing into crypto projects. "What is different now from previous setbacks is that retail investors are no longer the only ones experiencing the adversity," eToro analyst Simon Peters stated.

Instead, the numbers of major financial and other institutions are now also in the market. "The point JP Morgan makes is clear: although some money is exiting the sector, other money is still buying. Therefore, the essential thing for investors is to carefully consider the investment cases and look at those that present the greatest long-term opportunities," he added.

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