JPMorgan analysts warn that bitcoin looks ‘overbought’ despite correction

Bitcoin, following a volatile week, held on to $63,000 Friday


Konektus Photo/Shutterstock modified by Blockworks


Is bitcoin overbought?

That’s what analysts at JPMorgan believe. 

“The bitcoin positioning backdrop still looks overbought despite the past week’s correction,” analysts led by Nikolaos Panigirtzoglou wrote on Thursday.

Bitcoin, as of Friday afternoon, was holding on to $63,000 after a slight dip to $62,000 earlier in the day. After a rough week, with bitcoin (BTC) dipping over 15% from its new all-time high, it looked like it was making a recovery Thursday. It managed to sit around $67,000 before falling once more.

The bounce back came after the Federal Reserve held rates steady earlier this week, but announced that they expect three rate cuts by the end of the year

According to substack Cycles Edge, there are a few levels to watch. If bitcoin can regain $69,000, then analysts believe it could continue a run. If it doesn’t, the analysis suggested that investors should watch for $57,000 and $53,000.  

JPMorgan analysts think that there could be further downside to bitcoin’s price action as the halving approaches. The halving is expected on or around April 20 of this year and will drop the bitcoin rewards to 3.215 per block from 6.25 per block. 

Read more: Why we have no idea exactly when the next Bitcoin halving will happen

“The pace of net inflows into spot bitcoin ETFs has slowed markedly, with the past week seeing a significant outflow. In our opinion, this challenges the notion that the spot bitcoin ETF flow picture is going to be characterized as a sustained one-way net inflow,” Panigirtzoglou’s team wrote.

Net outflows hit $1.8 billion for the bitcoin ETFs in the past four days as of early Friday.

While some analysts believe that there could be short-term pain for bitcoin ahead of the halving, several price estimates ranging from $70,000 to $150,00 show that the consensus for bitcoin post-halving is positive. But JPMorgan analysts, who previously wrote that they see a potential for bitcoin to hit $42,000 post-halving, aren’t changing their tune.

“There remains considerable optimism in the market over the prospect for prices rising significantly by year-end, with a significant component of that optimism arising from a view that bitcoin demand via spot ETFs would continue at the same pace even as the supply of bitcoin diminishes after the halving event,” JPMorgan analysts wrote.

Coinbase Institutional, in a primer for institutional investors, noted that bitcoin could continue its run-up, though there’s “limited historical evidence” because this is only the fourth halving.

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