JPMorgan warns of bearish BTC market as swing mirrors 2018 – –

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JPMorgan warns of bearish BTC market as swing mirrors 2018 – –


  • The price of bitcoin rebounds nearly 25% from its June 8 low, lifting it up to near-critical resistance.
  • Ethereum price fails to take advantage of the June 8 intra-day rebound, bypassing BTC bullish sentiment.
  • XRP price remains stuck between the psychologically significant $ 1.00 and the crucial $ 0.0780 support.

The price of Bitcoin yesterday closed 11.98% higher, the largest daily return since February 8, when it emerged from a multi-week cut base. Ethereum’s price continues to float below the 50-day Simple Moving Average (SMA) without convincing price action to predict better prospects for the smart contract giant. XRP price is not cultivating any price pull after triggering a bullish hammer candlestick pattern.

Financial Stability Issues Generate Demanding Capital Requirements For Cryptos

On Thursday, the Basel Committee on Banking Supervision said that the financial sector, particularly the banking sector, faces increased risks from digital assets due to the disproportionate potential for money laundering, reputation issues and abuses. simple wild fluctuations in prices which could lead to defaults. The committee said that “the growth of crypto assets and related services has the potential to raise financial stability issues and increase the risks facing banks.”

The panel proposes that a risk weight of 1250% be applied to a financial institution’s exposure to Bitcoin and other cryptocurrencies. This means that a bank will need to hold a dollar of capital for every dollar of Bitcoin. The capital must be sufficient to withstand a complete write-off of exposure to digital assets without harming depositors.

The capital will be sufficient to absorb a full write-off of crypto-asset exposures without exposing depositors and other senior creditors of banks to a loss.

The proposal will not go into effect immediately, and due to the early stage of the cryptocurrency complex, initial policies are likely to change as the market develops. No clear timetable has been put forward, so due to the generally long process of agreeing and implementing the Basel rules, the proposal will not come into effect for several years.

The rebound in the price of Bitcoin did not remove doubts about its vulnerability

JPMorgan strategist Nikolaos Panigirtzoglou wrote a note that exposed the shift in recent weeks as negative momentum for the price of Bitcoin and could indicate a bear market. Backlash occurs when the current price of an underlying asset is higher than the prices traded in the futures market. Traders capitalize on the offset by selling short at the current market price and buying at the lower forward price.

In the note, JPMorgan cited 2018 as an example of a backlash, a year in which the price of Bitcoin fell 74%. The offset condition is an unusual development, but it is a sign of weak demand for Bitcoin from institutional investors.

The investment note also cited the notable decline in BTC’s share of the overall crypto market, currently 42% and down 70% since the start of 2021, as a concern. This is a sign that the crypto enthusiasm of retail investors was spreading to altcoins, signaling a bubble.

Despite the 25% rebound, nothing has changed significantly for the price of Bitcoin. The defense of the $ 30,000 price point on June 8 has solidified a 10,000 point trading range for the flagship cryptocurrency in the near future. Only a daily close below $ 30,000 or a daily close above $ 43,331 will release BTC from volatility.

The upside resistance still sits at the confluence of the rally’s 38.2% retracement from the March 2020 low of $ 41,581, January 8 high at $ 41,986, February 28 low at 43 $ 016 and the 38.2% retracement of the April-May decline to $ 43,331.

It is important to note that the price of Bitcoin is poised to register a death cross on the daily chart in less than a week.

BTC / USD daily chart

The downside support begins with the price zone between the May 23 low at $ 31,111 and the May 19 low at $ 30,000. Secondary support is the 61.8% retracement of the rally from March 2020 to April at $ 27,175.

Bitmex’s perpetual contract funding rate supports a bearish outlook for the price of Bitcoin. It was negative, indicating growth in short positions. However, it must be emphasized that when group thinking reaches an extreme, as the finance rate might suggest, it is an opportunity to buy fear. This could have been the reason for the considerable rebound from the June 8 low.

BTC Bitmex perpetual contract funding rate – Santiment

Ethereum price sentiment still reveals bearish tilt for digital token

Ethereum’s price set a bearish pennant pattern initially released on June 3, but it soon encountered noticeable resistance at the 50-day SMA at $ 2,895. On June 4, ETH reversed lower and June 5 was below the lower pennant trendline on a closing basis, which continued lower until June 8.

The symmetrical triangle’s measured movement target is $ 1,257, a 51% decline from the lower trendline position on June 4th.

To achieve the extreme price target, Ethereum’s price must overcome support at the May 30 low at $ 2,647, the May 23 low at $ 1,728, the 200-day SMA at $ 1,616 and ultimately at a 2018 high of $ 1,419.

ETH / USD daily chart

If Ethereum can record a daily close above $ 2,849, the outlook turns neutral for ETH investors and puts the cryptocurrency on the path to stabilization.

The daily active address metric supports the short-term bearish outlook. It is down from the all-time high in May. While it didn’t correspond to the same sudden drop as Bitcoin, this lack of address interaction is a concern.

ETH daily active addresses - Santiment

ETH daily active addresses – Santiment

XRP price action still doesn’t look good for investors

The price of XRP formed a bearish flag after the low on June 23 that resolved lower on June 5. Ripple fell into critical support of $ 0.780 on June 8 before staging a nearly 20% rebound and triggering a bullish hammer candlestick pattern formed on June 8.

The Ripple bear flag pattern’s measured movement target is $ 0.432, rewarding stubborn investors with a 53% loss from the June 5 blackout. The measured movement is calculated using the pole preceding the construction of the flag. It would be a blow to the narrative projecting a new record in 2021.

As long as the price of XRP holds $ 0.780, the outlook remains neutral with a slight bullish tilt, but failure to hold exposes Ripple to testing the 200-day SMA at $ 0.717, then the May 23 low at $ 0.652. Any weakness beyond these levels will put the measured movement target in the reticle.

XRP / USD Daily Chart

XRP / USD Daily Chart

A daily close above the psychologically significant $ 1.00 on a daily basis will be a fortunate reversal for Ripple investors.

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