JPMorgan Chase issued a warning that Bitcoin will not break through the $60,000 rally or will fade

Coingecko data shows that the current global total market value of cryptocurrencies is about US$2.06 trillion, and the market value of Bitcoin has narrowed to US$1.008 trillion, accounting for 48.8%; the market value of Ethereum is US$278.5 billion, accounting for 13.4%.

Bitcoin’s performance this week was mediocre, but Ethereum has brought benefits to traders in the crypto market. Bitcoin has been around $55,000 for the past month, and according to historical data from CoinDesk 20, the last time Bitcoin closed below this level was on March 26.

Since the beginning of April, Bitcoin’s dominance has fallen sharply, with its share dropping by about 10% to 48.8%, and at the beginning of 2021, this number has exceeded 70%. “Traders are looking for opportunities elsewhere,” said David Russell, vice president of market intelligence at the brokerage firm TradeDestation Group. “This seems to be what is happening now. This is not a bear market, but a potential sign of confidence in the crypto market.”

Ethereum, on the other hand, rose 3.2% to above $2,400. Looking at the Ethereum/Bitcoin chart, the current ratio is continuing to rise, which means that traders are selling Bitcoin for Ether. The current ratio is much higher than the 10-day and 50-day moving averages.

Agency reminder: Bitcoin is in a bubble

Scott Minerd, global chief investment officer of Guggenheim Investments, a US asset management company with more than $250 billion in assets under management, warned on Wednesday that Bitcoin is “bubble” and that there may be a “major adjustment” in the near future. , Although he is still optimistic about the world’s largest cryptocurrency for a long time.

Minerd believes that Bitcoin is rising too fast. “In view of the sharp rise of Bitcoin in the short term, the bubble phenomenon is very prominent, I think the price of Bitcoin will usher in a major adjustment.”

“I think the price of Bitcoin may fall back to $20,000 to $30,000, which is a 50% drop, but the interesting thing is that we have seen this kind of decline before,” Minerd said. And in his view, this is part of the “normal evolution of the long-term bull market,” and Bitcoin prices will eventually reach between 400,000 and 600,000 US dollars.

At the end of last year, Minerd shared his long-term target price of Bitcoin for the first time, which attracted people’s attention. He mentioned the scarcity of Bitcoin-a constant output of 21 million Bitcoins, and Bitcoin’s relative to gold and other assets. the value of. On the same day he made the above remarks, Bitcoin broke the $20,000 mark for the first time.

Bitcoin has continued its sharp rise since 2020, and has risen by nearly 90% so far this year. Institutional investors’ recognition of Bitcoin is considered to be one of the factors contributing to the cryptocurrency’s upward trend. In addition, some companies such as Tesla invest part of their cash in Bitcoin, and financial companies such as Mastercard and Goldman Sachs are also expanding their businesses around encryption technology.

The speed of Bitcoin’s rise even worries some cryptocurrency bulls such as Minerd. He also warned earlier this year that Bitcoin may undergo a short-term correction. Some people who are bearish on cryptocurrencies continue to believe that Bitcoin is in a bubble and will eventually burst.

JPMorgan Chase strategists headed by Nikolaos Panigirtzoglou wrote in a report on Tuesday that if the largest cryptocurrency does not exceed $60,000 soon, the momentum signal will collapse.

They said that traders, including commodity trading advisors (CRA) and crypto funds, may have contributed at least to a certain extent to the accumulation of long bitcoin futures positions in recent weeks and the liquidation of positions in the past few days. “In the past few days, the Bitcoin futures market has experienced substantial liquidation similar to those in mid-February, mid-January or the end of November last year,” said strategists. “Momentum signals will naturally decay in the next few months because they are still at a high level.” JPMorgan pointed out that in these three examples, the overall momentum of Bitcoin’s liquidity is strong enough to make Bitcoin The rapid breakthrough of key thresholds led to momentum traders increasing their positions further. Strategists said: “Under the current situation, whether we will see the previous scenario repeat itself remains to be seen.” They added that the likelihood of this happening again seems to be lower because momentum decays earlier, so More difficult to reverse. They said that the money flowing into the Bitcoin fund also appears to be weak.

From a technical point of view, Bitcoin has fallen five trading days in the past six trading days and is currently below the 50-day moving average of approximately $56,819. For many chart analysts, this is a bearish indicator because it tends to determine the momentum trend of prices. If Bitcoin fails to break the short-term trend line, it may go lower and test the $50,000 level, implying a further decline of about 10%. The next support level will be the 100-day moving average cut of approximately $49,212.

Volatility is the charm of Bitcoin

Bill Miller, a long-term value investor who has held Bitcoin for many years, said on Tuesday that he is not worried that Bitcoin will be in a bubble like in 2017, when the price of Bitcoin reached nearly $20,000. It’s a historical high, but plummeted by about 80% in the next few months.

“(Bitcoin’s) supply grows by 2% every year, but demand grows faster than supply. This is what you really need to know, which means its value will get higher and higher,” Miller said in an interview. “However, this may not be a straight up, because in the case of Bitcoin, volatility is the price you pay for its good performance.”

Raoul Pal, a former Bitcoin enthusiast at Goldman Sachs, also stated that Bitcoin’s volatility is its main attraction, because it is this volatility that makes Bitcoin grow exponentially. Everyone must learn to adapt to such a volatile asset.

Raoul Pal has a diversified portfolio of crypto assets, covering exchanges, decentralized finance (DeFi) and community tokens.

“I may now be 50% Bitcoin, 30% Ethereum, 20% alternative tokens… I have to work hard to maintain a balance in the entire game field, because I really don’t know what will win or what will not be in this field. “Pal said that he also has a small exposure to the emoji-based cryptocurrency Dogecoin, “getting fun from it.” “It became a joke, it became a network in itself. Will it last forever? Who knows? But I still bought some because everyone supported me behind the scenes.”

Pal also mentioned that increased regulation and uncertainty may push Bitcoin down. However, Pal said that the market is more worried about uncertainty than regulation itself. He expects that regulation will benefit Bitcoin in the long run. He said: “I don’t think anyone will stop Bitcoin, and governments will eventually reach a balance to ensure that crypto assets are taxed.