JP Morgan says bitcoin’s descent could continue
A report from JP Morgan has been released claiming that the current bitcoin price decline could continue until the end of March.
The lengthy report (28 pages) analyses a lot of data and metrics, as well as bitcoin’s history over the past few years, and comes to the Immediate Bitcoin conclusion that a price of around $35,000 should currently be considered as the upper limit of the fair value range.
This conclusion therefore leads analysts to believe that unless BTC’s price volatility eases rapidly, the goal of reaching $50,000 or even $100,000 by year-end is not sustainable.
However, it must be said that this report is three days old, and indeed volatility has reduced in recent days.
According to the same analysis the lower bound would be $11,000, so for JP Morgan analysts the current fair value of BTC would be between $11,000 and $35,000, with the average being $23,000.
What influences the price of Bitcoin according to JP Morgan
The report however clearly highlights that, compared to 2017, the current price rally is mainly due to institutional capital inflows into this market, but assumes that among these not all constitute long-term investments, and instead there is a good speculative component.
In addition, there was also a strong retail component, particularly from services such as PayPal, but this had subsided in the last two weeks.
In order to start a new bullish impulse, they argue that the price would have to return to above $40,000 soon, otherwise the descent could continue until the end of March, but as things stand at present there does not seem to be a basis for a return to above $40,000.
However, in the long term, they reiterate the theoretical price target of $146,000 that was suggested a few weeks ago.
The report also argues that bitcoin should still be regarded as a risky asset, rather than a safe asset, which, for example, shares with gold an increased correlation with the S & P500 from March 2020 onwards.