Analysts at JPMorgan identify Bitcoin’s $40,000 price mark as an important bar that bullish traders need to reclimb in order for the currency’s rally to persist.
A Monday report by Bloomberg shows that Bitcoin could further slip unless it can surpass the $40,000 mark again.
For that to happen and for it to be sustained, greater input from the multi-billion dollar bitcoin trust owned by Grayscale Investments will be needed according to JPMorgan strategists. They considered demand for bitcoin futures in their analysis.
“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur,” strategists said in a note to investors on Friday referring to a price breach above $40,000.
On Saturday, Grayscale revealed that it had raised its largest single-day raise in the firm’s history, adding above $700 million to its family of products of which Bitcoin is among.
But how long can the digital asset manager sustain those levels? Can’t say yet. But analysis from JPMorgan shows Bitcoin is in a position akin to November 2020 when the cryptocurrency was struggling to break its all time high and surpass the $20,000 mark – a campaign that failed.
The cryptocurrency did eventually cross the $20,000 mark in the following month, December. JPMorgan analysts attributed that event to Grayscale’s involvement in the market.
If bitcoin does not succeed in retaking $40,000, “momentum signals will naturally decay from here up till the end of March” one of the analysts said in the report.
As at time of writing, Bitcoin trades at $36,906.