• JPMorgan analyst Nikolaos Panigirtzoglou believes that the recent decline in Bitcoin’s price is coming to an end.
• Recent positive news, such as PayPal launching its own stablecoin and Coinbase Global Inc launching “Base”, have been overshadowed by the uncertainty surrounding the Securities & Exchange Commission’s appeal of Ripple’s decision.
• Fed Chair Powell has also signalled no near-term intent of cutting rates, which could be negative for cryptocurrencies.
JPMorgan Analyst Says Weakness in Bitcoin Appears to be at its End Phase
JPMorgan analyst Nikolaos Panigirtzoglou believes that the recent decline in Bitcoin’s price is coming to an end. Price of a Bitcoin has declined nearly 17% in less than two months but Panigirtzoglou attributes this weakness to a bunch of long positions that were liquidated as positive news continued to fade and believes that „unwinding of long positions appears to be at its end phase rather than beginning“. He added that there have been positive news in cryptocurrency market recently including PayPal Holdings introducing its own dollar-pegged stablecoin and the launch of “Base” by Coinbase Global Inc but investors are staying on the sidelines due to lack or regulatory clarity.
China-related Concerns and Higher Real Yields Impacting Tech Space
Panigirtzoglou further noted that the tech space has been taking a hit due to China-related concerns and higher real yields in US with Nasdaq Composite down about 7%. He said Fed Chair Powell also said at Jackson Hole symposium that rates may go even higher from here and signalled no near-term intent of cutting rates which doesn’t bode well for cryptocurrencies either.
Investors Waiting For Regulatory Clarity
The JPMorgan analyst agreed that there has been positive news in crypto market but investors are still waiting for regulatory clarity partly because SEC has appealed the recent decision in Ripple’s favour which could result in a trial with outcome not expected until next year inducing new round of legal uncertainty for crypto markets making them sensitive mid-process news.
Crypto Markets Could See Limited Downside Over Near Term
Nikolaos Panigirtzoglou concluded his research note saying he sees limited downside for crypto markets over near term given unwinding of long position appears to be at its end phase rather than beginning.
Positive News In Crypto Market Fading Away
Overall, despite recent positive news in crypto market including PayPal Holdings introducing its own dollar-pegged stablecoin and Coinbase Global Inc launching “Base”, investors are staying on the sidelines due to lack or regulatory clarity while Fed Chair Powell signalling no near-term intent of cutting rates could also be negative for cryptocurrencies