Bitcoin’s price could suffer more if the asset fails to reclaim $60,000 soon, said analysts from the US multinational banking giant JPMorgan Chase & Co. They compared Sunday’s market crash with similar developments in the past few months but argued BTC lacks sufficient momentum now.
Bitcoin and the entire cryptocurrency ecosystem plummeted in value on Sunday as more than $360 billion were evaporated from the market cap. The largest digital asset led the charge with a massive $9,000 drop to a 3-week low of $51,500.
Although BTC has reclaimed about $4,000 since then, fears emerged if it has broken below vital support line. Furthermore, JPMorgan strategists, led by Nikolaos Panigirtzoglou, outlined the potential adverse effects this price slump could have for the asset in the long run.
“Over the past few days, Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January, or the end of last November.”
Although they saw similarities between the past few corrections, they referred to the latest one as a potential game-changer, especially if BTC fails to recover rapidly as it did months ago.
“Whether we see a repeat of those previous episodes in the current conjuncture remains to be seen. The likelihood it will happen again seems lower because momentum decay seems more advanced and thus more difficult to reverse.”
The analysts also said the flows into large BTC funds, including Grayscale’s Bitcoin Trust, have decreased in the past several weeks. Ultimately, they highlighted bitcoin’s old nemesis of $60,000 as the most significant obstacle that has to be reclaimed soon for the asset to resume its bull run.
The popular US investor and fund manager, Bill Miller, whose fund allocated $300 million in GBTC in February 2021, opposed JPM’s narrative. During recent interview, Miller also touched upon the latest market crash but called it just a volatile setback, which is “the price to pay for BTC’s performance.”
He believes the cryptocurrency has only started its mainstream adoption and differentiated the 2017 bubble with the current bull run.
Miller asserted that BTC is a game of demand and supply, and the former significantly outplaces the latter. The supply increases by roughly 2% per year, while the demand is substantially higher. Additionally, he called bitcoin a better version of gold and predicted that BTC could ultimately reach the yellow metal in terms of market cap.