The cryptocurrency market’s climb into the bear pit has been slow and steady, with many currencies like Bitcoin [BTC], Ethereum [ETH] and Bitcoin Cash [BCH] all maintaining a sideways movement after the bullish spike. Bitcoin Cash, which has been in the news because of its biggest proponent Roger Ver, has created ripples in the cryptosphere with its developmental announcements.
The trend lines show a slow uptrend with the Bitcoin Cash [BCH] prices rising from $423 to $426.65. The support for the cryptocurrency has been holding at $408 ever since the massive bearish drop, with the support at $444.96.
The Relative Strength Index [RSI] has fallen from the overbought zone, with the cryptocurrency moving sideways at press time. The sideways movement indicates that the buying pressure and the selling pressure is at equilibrium.
The MACD line and the signal line have undergone a crossover with both the lines dipping downwards indicating a bearish trend. The MACD histogram has been showing a bearish trend.
The one-day graph for BCH indicates an acute downtrend, with the prices falling from $510.55 to $423.8. The resistance on the one-day chart has been holding at $413.52.
The Chaikin Money Flow indicator has been below the axis, with the graph taking a hairpin turn towards the bearish zone. The movement of the CMF lines paints a picture of the money flowing out of the market, a sign of a change in the investor sentiments.
The Bollinger bands have maintained the shape of solid parallel lines, which can be attributed to the sideways movement. The chokehold on the Bollinger cloud comes at the end of a Bitcoin Cash price outbreak.
The bear’s hold on the cryptocurrency market seems to have become evident again, with all the above indicators indicating the reign of the bear. The MACD graph, which has supported the bull for the past couple of days, has also sided with the bear this time around.
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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off.
A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency.
Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards.
Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop.
It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise.
Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing.
The analyst added:
“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”
With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past.
Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated:
“Great to see JPM finally admitting that Bitcoin has intrinsic value.
Now wait till they understand that miners who run a surplus tend to begin hording.”
Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee.
This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations.
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