According to a Bloomberg report on Friday, Bitcoin has experienced a pullback of over 10% from its all-time high. The demand for spot Bitcoin exchange-traded funds (ETFs) is also showing signs of moderation, as indicated by the largest four-day outflow for the group of 10 spot Bitcoin ETFs since their introduction on January 11. Furthermore, analysts at JPMorgan Chase and Co. have cautioned that this retreat in Bitcoin’s price may still have room to continue. As a result, Bitcoin is on track for one of its worst weeks this year, with a 4% retreat in its value. As of the time of writing, Bitcoin was trading at approximately $65,400. Please note that cryptocurrency prices are highly volatile and can change rapidly.

Bitcoin is Still Overbought

JPMorgan strategists have reiterated their belief that Bitcoin is overbought and have renewed their prediction that further declines may occur leading up to the halving event in April. The halving event will reduce the supply of newly minted BTC from miners. According to the JPMorgan strategists, the sustained open interest in CME Bitcoin futures, along with declining flows in ETFs, are significant bearish signals for Bitcoin’s price. They noted that the pace of net inflows into spot Bitcoin ETFs has slowed significantly, with a significant outflow observed in the past week. This challenges the notion of sustained one-way net inflows into spot Bitcoin ETFs. As the halving event approaches, the strategists believe that profit-taking is more likely to continue, especially given the overbought positioning backdrop despite the correction in the past week. Last month, JPMorgan predicted a gradual decline in BTC price towards $42,000 after April as the excitement surrounding the halving event diminishes. Although BTC reached a record high of nearly $73,798 on March 14, there are indications that enthusiasm among retail traders may be waning. Naeem Aslam, the chief investment officer at Zaye Capital Markets, pointed out that the rally didn’t gain momentum from the all-time high, leading to questions about the strength of the rally. Aslam expressed concerns that if the halving event fails to maintain momentum, a significant retracement could occur, potentially pushing the price below $50,000.

Despite Recent Bitcoin Decline, Bernstein Expects Surge to $90,000

Bernstein, the investment firm known for its analysis and insights, has recently made an upward revision to its year-end forecast for Bitcoin, despite the recent slide in cryptocurrency prices. In a research note, Bernstein adjusted its price target for Bitcoin from $80,000 to $90,000, indicating their continued optimism about the digital currency’s performance. One of the key factors behind Bernstein’s revised forecast is Bitcoin’s recent rise to around $74,000, which has demonstrated resilience in the face of market volatility. This notable price appreciation has sparked renewed interest and confidence in the cryptocurrency, prompting Bernstein to reassess its projections. Moreover, Bernstein expressed optimism about the positive response to new spot Bitcoin exchange-traded funds (ETFs). The introduction of these ETFs has provided investors with another accessible avenue to gain exposure to Bitcoin, further expanding the market and driving demand. The strong inflows into these ETFs have played a role in shaping Bernstein’s positive outlook for Bitcoin’s future performance. In their research note, analysts Gautam Chhugani and Mahika Sapra from Bernstein highlighted several factors that contribute to their bullish stance on Bitcoin. They emphasized the start of a new Bitcoin bull cycle, indicating that the digital asset is entering a phase of significant growth and upward momentum. This aligns with the belief that Bitcoin operates in cycles, with periods of consolidation followed by surges in price. Additionally, the aggressive expansion of miner capacity has caught Bernstein’s attention. Bitcoin mining has become an increasingly competitive industry, with miners investing in sophisticated equipment and expanding their operations to capitalize on the potential rewards. This expansion signifies confidence in the long-term viability of Bitcoin and its potential for further price appreciation. Another factor mentioned by Bernstein is the record-high revenues reported by Bitcoin miners. As the price of Bitcoin surged, mining operations became more profitable, leading to increased revenues for miners. This positive financial performance adds to the overall attractiveness of Bitcoin mining stocks as an investment option for equity investors seeking exposure to the cryptocurrency market. While Bernstein has revised its year-end price target for Bitcoin, the research note also indicated that the firm adjusted its forecast for the upcoming halving event in April. However, specific details regarding this adjustment were not provided in the available information. It’s important to note that forecasts and projections in the cryptocurrency market are subject to various factors and can be highly speculative. The crypto market is known for its volatility, and prices can experience significant fluctuations within short periods. Investors should exercise caution, conduct thorough research, and seek professional advice before making any investment decisions in the cryptocurrency space. As the year progresses, market conditions and investor sentiment may continue to evolve, potentially impacting the performance of Bitcoin and the broader cryptocurrency market. Bernstein’s revised forecast showcases their ongoing analysis of market trends and their commitment to providing insights into the ever-changing landscape of digital assets.

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