Weak appetite when buying the dip? The crypto market is still seeking stabilization, more than a week after the Bitcoin price crash of May 19 that saw the digital currency drop down to half its all-time high.
Since then, a lot of attention has shifted towards institutional investors, and whether they will get back in business.
Apparently, according to analysts at JPMorgan, some are not.
These investors are demonstrating a weak appetite when it comes to securing the cryptocurrency at discounted rates. Instead, the 35% drop in price of Bitcoin in the month of May was enough to turn the interest of at least some of these investors towards gold.
As reported by JPMorgan analyst Nikolaos Panigirtzoglou:
“Bitcoin funds continue to see outflows and gold exchange-traded funds continue to see inflows, suggesting that the shift away from bitcoin and back into traditional gold by institutional investors is still underway.”
The report further notes that the boom-and-bust dynamics of the past weeks represents a setback to the institutional adoption of crypto markets in general, and that of Bitcoin and Ethereum in particular, as both digital assets continue to fall.
In fact, the analyst now sees the fair value of Bitcoin in the $24,000 to $36,000 range medium term.
The bank further said:
“We had argued previously that the failure of bitcoin to break above the $60K threshold would see momentum signals turn more bearish and induce further position unwinds, and that this has likely been a significant factor in the correction last week in pushing commodity trading advisors and other momentum-based investors to cut positions.”
Meanwhile, things are not that different on the Chicago Mercantile Exchange. The analyst notes that there is a similar picture of little appetite to buy the dip there, and the leading cryptocurrency could continue to fall in the short term.
At press time, Bitcoin was trading at $35,956, representing a 2.36% drop over the last 24 hours.
Speaking of, the cryptocurrency is still up 24% so far in 2021.
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