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Bitcoin’s [BTC] parabolic price rally was buoyed by Consensus 2019, claims Fundstrat’s Lee




Bitcoin [BTC] parabolic price rally was buoyed by the Consensus factor, claims Fundstrat’s Lee
Source: Pixabay

Bitcoin [BTC] is riding a bull wave unlike anything else, already recording a 10-month high. With the upswing not looking to slow down anytime soon, several factors have contributed to this rise. If these factors sustain themselves, the king coin could be in the green for a long time.

One factor that is speculated to have contributed to this rise is the ongoing Consensus 2019 Conference in New York. This was suggested so by Fundstrat’s Head of Research, Tom Lee. Given the exhaustive nature of this catalyst, can one conference attended by the who’s who of cryptocurrency and blockchain have such a buoyant effect on the price of Bitcoin and the collective market?

Lee tweeted,

“Definitely think @coindesk #consensus2019 is a major factor (not only) for recent parabolic bitcoin move, especially considering higher overall quality of attendees at the largest crypto conference”

Source: Trading View

Consensus 2019 began on May 13 at exactly 0700 ET, when Bitcoin was trading at just under $7,100. However, in just 10 hours, the price shot up by 13.77 percent to reach $8,045. The latter price point was realized at 1900 ET, just one hour after the conclusion of Day 1. Interestingly, after Day 1 was wrapped up, Bitcoin dropped to $7,700. However, it has since recovered to go above $8,000, at press time.

Based on the price chart, there is truth to Lee’s speculation. However, causation cannot be implied by looking at just one isolated case. Hence, it is deemed necessary to chart Bitcoin price correlation to previous Consensus conferences.

Consensus 2018:

Source: Trading View

The Coindesk conference for 2018 was held between May 14 and 16, while the market was reeling under the bears of the early-crypto winter. Despite the decline from well over $15,000 to below $8,300 at the beginning of May, Consensus did play its bullish role in 2018 as well. On May 14, Bitcoin rose from $8,413 to $8,855 within less than 8 hours, sustaining $8,500 till the close of the conference. However, come the end of the week, Bitcoin almost fell below $8,000 owing to correction.

Consensus 2017:

Going back to 2017 prior to the $20,000 peak and the lack of mobilization of the cryptocurrency market, the price effect remains the same. Consensus 2017 was held on May 22-24 and a week prior to the same, Bitcoin began to pump, just as it did last week.

On May 13, BTC price was $1,700 and rose by a whopping 58 percent to reach $2,700 by May 24. However, a price cliff was seen soon after, with Bitcoin dropping below $2,000 a day after the conference.

In both cases, the price rose before and during the Consensus conference, but experienced a non-drastic correction immediately after. Given how the market has rallied prior to the recent conference, a sustained rise is on the cards for the past two days, followed by a correction. Although, market conditions during the past conferences have all been starkly different, some correlation can be gathered. However, a single threat of causation cannot be inferred.

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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise




JP Morgan: Big bank stands corrected at Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Source: Pixabay

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.

Source: Bloomberg

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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