As Bitcoin (BTC) price recovers from the dive, banking giant JPMorgan is warning investors of possible risks. At the same time, Glassnode is drawing an extremely bullish scenario for the largest cryptocurrency. The market update.
The fear of the global spread of a mutated pathogen has led to sales on the crypto market. But not only the crypto space trembles in the face of a mutation in the coronavirus. In traditional markets too, investors take their chips off the table and are risk averse.
Many fear that the situation on the markets will not calm down anytime soon. Hence, some investors take their profits and also sell BTC.
However, Bitcoin can currently recover from the course correction. At the time of going to press, the Bitcoin price was quoted at 22,701 US dollars and thus posted a slight plus of 0.3 percent on a daily basis. The market capitalization is currently over 420 billion US dollars.
JPMorgan Bitcoin Statement
Investment strategists at JPMorgan believe that the Grayscale Bitcoin Trust can help determine the likelihood of a Bitcoin correction. According to the experts, only a small inflow of capital into the trust, which is particularly popular with institutional investors, indicates a possible price correction. Grayscale now manages over $ 15 billion in digital assets.
Inflows into the fund amount to approximately $ 1 billion per month. As a result, some experts suspect that the latest price rally in the digital reserve currency is more sustainable than past rallies.
“Bitcoin is difficult to describe as overvalued as the inflows into the Grayscale Trust are too large to allow momentum traders to liquidate positions. However, should capital inflows slow, the risk of a price correction increases.
According to Bloomberg, JPMorgan’s investment strategist Nikolaos Panigirtzoglou.
Important deadline in the options markets
In addition, an important day is looming on the Bitcoin futures markets next Friday. Skew reports that over 102,200 BTC options will expire on December 25th. Options contracts allow investors to bet on falling or rising prices in the crypto market. According to Skew, the decline in Bitcoin options indicates important price levels at $ 15,000 and $ 20,000.
The expiration date of Bitcoin options contracts has often led to increased volatility in the crypto market in the past. Holders often adjust their options contracts before such expiration dates. Investors who are in the profit could therefore sell their cryptocurrencies on a large scale after the expiry of the options contracts.
Usually, the Bitcoin options expire a day or two in advance. It can therefore be assumed that increased volatility can be expected in the next few days.
Glassnode: “Bitcoin is in a supply and liquidity crisis”
Even if the options markets announce increased price fluctuations for BTC in the short term, the big picture remains positive. The number of Bitcoin addresses that only buy digital gold and hold it for the long term has continued to rise.
In addition, stocks on crypto exchanges continue to melt, with BTC supply falling rapidly. Meanwhile, the demand from institutional investors has grown rapidly in recent months.