Momentum signals could collapse if Bitcoin isn’t able to break back above $60,000 soon, JPMorgan Chase & Co. strategists were quoted in a Bloomberg report.
- Bitcoin climbed to an all-time high of $64,870 when Coinbase Global Inc. listed on the Nasdaq, but has since retreated back to $55,000. This is up 90% year-to-date.
- JPMorgan strategists believe that traders including Commodity Trading Advisers (CTAs) and crypto funds were part of the reason for the recent buildup of futures in the past weeks, as well as the recent unwind.
- The strategists said momentum signals will “naturally decay” from here for several months after the Bitcoin futures market recorded a steep liquidation similar to that experienced in mid-February, mid-January, and end-November all in 2020.
- The overall flow impulse drove Bitcoin to break out above key thresholds then, but strategists say there is a lower possibility of this happening as the momentum decay is more advanced and will be difficult to counter.