The last few times, Nikolaos Panigirtzoglou has witnessed such negative price action for bitcoin, buyers have returned in time for preventing deeper slums. This time the JPMorgan Chase & Co. strategists are much worried.
In case the largest cryptocurrency is not able to break its back above $60000 soon, the momentum signals will collapse. It is more likely that the traders who are including in these crypto funds and Commodity Trading Advisors and are now partly behind the buildup of long bitcoin futures in recent weeks.
The strategist said that over the past few days, the bitcoin futures markets are experiencing a steep liquidation in a much similar fashion to the middle of last February. The momentum signals are going to naturally decay for many months, subject to their present elevated level.
“Over the past few days Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November,” the strategists said. “Momentum signals will naturally decay from here for several months, given their still elevated level.”
Whether they see a repeat in those previous episodes in the present conjuncture remains to be seen. The likelihood is going to happen again, and it seems lower as the momentum decay seems to have a more advanced yet more difficult reverse. It is flowing into the bitcoin fund as it also appears weak.
“Whether we see a repeat of those previous episodes in the current conjuncture remains to be seen,” the strategists remarked.
Bitcoin has risen high up to a level of $64870 around the time of Nasdaq listing with Coinbase Global Inc. However, it is having its retreats back below to the level of $60000. The cryptocurrency is still up with 90% of year-to-date.