JPMorgan’s Tactical Outlook on Bitcoin and Cryptocurrency Markets

Cryptocurrency Market Outlook: Tactical Rebound Expected

Recent analyses from JPMorgan Chase & Co. (JPM) indicate that any potential rebound in cryptocurrency markets over the near term is likely to be tactical rather than the onset of a new long-term bullish trend. In a research report released last week, the bank highlighted that the current price of Bitcoin (BTC) stands at approximately $67,220, which is significantly above its estimated production cost of $43,000. Furthermore, when comparing Bitcoin’s price to its volatility-adjusted value against gold, which is pegged at $53,000, the conclusion is clear: Bitcoin is presently overvalued.

JPMorgan also pointed out that momentum in Bitcoin futures has shown weakness in recent weeks, primarily due to liquidations linked to various parties, including creditors of Gemini, Mt. Gox, and even the German government. However, the bank anticipates that these liquidation pressures may ease this month, and they are cautiously optimistic about a rebound in positioning within Chicago Mercantile Exchange (CME) Bitcoin futures as we move into August.

Interestingly, Bitcoin and gold are both poised to benefit from the increasing likelihood of a potential victory for Donald Trump in the upcoming elections. Analysts led by Nikolaos Panigirtzoglou noted that a second Trump presidency could be perceived as more favorable towards cryptocurrency companies and the regulatory environment surrounding them, especially in contrast to the current administration under President Biden.

Moreover, there is speculation that Trump might announce Bitcoin as a strategic reserve asset during the forthcoming Nashville Bitcoin conference. Should this announcement materialize, it could potentially trigger a parabolic rise in Bitcoin’s price, as suggested by Markus Thielen, founder of 10x Research.