Bitcoin could fall to lower levels if the price does not hold above the psychological level of $40,000. JPMorgan analysts hold that view, Bloomberg reports.
The bank’s chief strategist Nikolaos Panigirtzoglou pointed to potential pressure from momentum players if the price cannot break above the resistance at the top of the forming triangle. He says that the key to understanding the situation may lie in analyzing demand for Bitcoin futures and Grayscale Bitcoin Trust (GBTC).
Data: Bloomberg.
“Daily inflows into GBTC are likely to stay around $100 million over the coming days and weeks for this breakout to occur,” the note says.
In their conclusions, Panigirtzoglou and his colleagues relied on the price action of the leading cryptocurrency at the end of November, when the $20,000 level served as a benchmark for the bulls. Its breakout was aided by inflows into the Grayscale Bitcoin Trust (Grayscale Investments).
At the time of writing, Bitcoin was trading around $35,900, according to CoinGecko.
On January 16, Grayscale Investments CEO Michael Sonnenshein reported a record daily inflow into the company’s products of $700 million.
Yesterday, @Grayscale raised north of $700 million into its family of products…momentum from Q4 seems to be picking up speed into the new year.
If you haven’t checked out our 4Q20 report yet: https://t.co/SwqBKwvO1S
— Michael Sonnenshein (@Sonnenshein) January 16, 2021
“It seems the momentum from Q4 is gaining speed into the new year,” he said.
According to Grayscale Investments’ quarterly report, GBTC growth in October-December was proportional to 194% of Bitcoin issuance for the same period. Over the year, the supply of the leading cryptocurrency available to the company rose from 1.45% to 3.31%.
According to Bitcoin Treasuries, more than 570,000 BTC are under Grayscale Investments’ management.
In total, institutional investors purchased more than 1 million BTC worth about $40 billion.
Subscribe to ForkLog News on VK!