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JPMorgan Cuts Bitcoin Long-Term Price Target – 2 Possible Short-Term Scenarios

Market strategists at banking giant JPMorgan reportedly reduced their long-term BTC price predictions after BTC lost 50% in just 2 months.

In a Business Insider report, analysts at JPMorgan have sharply reduced their long-term price targets for Bitcoin, stating that BTC’s explosive, or bearish, nature will hinder widespread investor adoption.

“Our previous prediction that BTC’s volatility ratio to gold would drop to roughly double by the end of the year seems unrealistic. Our fair market value for BTC, based on Bitcoin’s volatility ratio of about four times gold, would be 1/4, which is $150,000 or $38,000…

The biggest challenge for Bitcoin going forward is its volatility, and boom-and-bust cycles are hampering further institutional adoption.”

In November, with Bitcoin trading at an all-time high of $69,000, JPMorgan analyst Nikolaos Panigirtzoglou predicted BTC would hit $150,000 as investors looked for a hedge against inflation.

“Bitcoin’s appeal as an inflation hedge may have been bolstered by gold’s failure in recent weeks amid mounting inflation concerns.”

Now, strategists at the giant bank say Bitcoin is likely to fall further as there are no signs that the current correction is over yet.

“Open interest on futures contracts and the amount of bitcoin or ETH held on exchanges suggest positions will be less panicked or jerky compared to last May, especially for larger crypto investors.

Accordingly, this implies that this month’s adjustments look less like a capitulation than they did last May.”

Bitcoin price analysis

Daily time frame

Looking at the daily chart, bitcoin price has recovered since falling more than 50% against ATH to $33,000 last Monday.

However, Bitcoin currently remains below two key resistance areas. The first is the blue downtrend line that pushes the price down every time it tries to break above it and the second is the range from $39,000 to $41,000 marked in red.

On the downside, the daily RSI has broken out of the multi-month downside resistance. The last two breakouts have resulted in huge upside moves over the past year.

In summary, the following 2 scenarios can occur:

1. Break the descending trend line and the red zone (around $40,000 area), consolidate above this zone for a while, retreat to resistance and start to rally into the $50,000-$60,000 channel .

2. Rejected by both the trendline and horizontal resistance zone, forms a new lower high to confirm the downtrend, then falls to lower prices and tests the support zones to develop a new local bottom.

Source: Trade View

4 hour time frame

Bitcoin has multiple levels of resistance on the lower time frame (LTF). Price is making lower highs and lower lows within a solid descending descending channel.

The price is currently trading below the 100MA and the upper trendline of the channel. Therefore, if the market is to recover and start a new rally, it is imperative to break out of the trend line and make a new higher high as shown by the green line.

Another scenario is that the price hits the trendline, makes a new lower high and then rejects to retest the lower levels (red line).

On-Chain Analysis: Stablecoin Inflows

The chart below includes BTC price and a 7-day moving average of stablecoin inflow.

As you can see, the volume of stablecoins deposited on exchanges has increased significantly over the past few days.

The last time we saw this metric rally this strong was in May 2021 after the price fell to the $30,000 level. This shows liquidity ready to buy the dip. However, the accumulation periods after a large crash move usually last for some time. So it could be weeks or even months before we see another bull run like last year.

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