JP Morgan analysts cite regulatory concerns and profit taking for the recent sale.
They also said that there was room for other downward moves driven by dynamic traders.
Analysts have said Grayscale will play a leading role in the continued rise or fall of bitcoin
The recent drop in Bitcoin’s price has erased some speculative „foam“, but further downtrends remain possible, analysts at JPMorgan Chase say.
For context, Bitcoin’s (BTC) price started last week with a significant rise, hitting a new annual high of $ 19,500 before falling sharply (nearly 14%) on November 26.
The drop coincided with Black Friday , with BTC / USD falling around the same time as the famous discount shopping day, leading many to note the comparison.
I’m assuming the Black Friday bitcoin sale is officially over. Hope you have refueled
The main causes of the recession, according to a Bloomberg article , were profit taking, concern over new regulations and the unfolding of Bitcoin futures. Since then the price has recovered from the mini-crash and has risen again.
According to BeInCrypto’s analysis , its rally is likely a retracement rather than the start of a new uptrend.
Although Bitcoin rebounded from steep price declines over the Thanksgiving holiday, analysts at JPMorgan Chase also forecast further declines.
As quoted in Bloomberg, Nikolaos Panigirtzoglou, managing director of JP Morgan, said, “dynamic traders have room to spread further” [a drop in the price of bitcoin].
The importance of Grayscale
Panigirtzoglou also highlighted Grayscale, and its important Bitcoin Trust, as playing a central role in future developments in BTC prices.
The cryptocurrency asset management company has long been important because it would be favored by institutional investors looking to gain exposure to bitcoin (and other digital assets).
Grayscale has significantly increased its crypto holdings since the start of 2020. After eleven months of ever-higher gains, as of November 27, Grayscale’s assets under management (AUM) hit an all-time high.