JPMorgan Chase’s analysts have stated that bitcoin prices will decline to the $25,000 level before more extensive momentum signals capitulation.
They expect the cryptocurrency market to enter the healing process soon but anticipate further sell-offs before capitulation. Tesla probably did the right decision for liquidating all their Bitcoin holdings.
Bitcoin price stood at $36,343.15 at 3:43 pm on Tuesday, according to CoinMarket.
JPMorgan analysts, including Josh Younger and Veronica Mejia Bustamante, recently communicated about the possibility of the cryptocurrency market in a note.
They revealed that the near-term outlook for the crypto market was “challenging”; remarked that blockchain data implied recent cryptocurrency sell-offs were made to cover losses. They mentioned that,
“There is likely still an projection of underwater positions which need to be cleared through the market.”
They also warned of the probability of increased production costs of BTC as China’s continued crackdown pushes bitcoin mining abroad.
Bitcoin’s expenses of production are historically tied to its price, several analyses have shown. So, a price strike in the cost of mining may have a booster effect on the bitcoin price.
Yet, they see stability in the bitcoin futures market as a definite factor. Thus, the note implies that the cryptocurrency market seems to be starting a healing process. Although is not entirely healthy at this point yet.
Tesla Was Right To Dump Bitcoin
The Tesla and Bitcoin drama has been unfolding over the last few months. Like a bad (or good) celebrity relationship; the initial coming together of the two techs “disruptors” was met with short controversy.
Tesla started accepting Bitcoin as a purchase option for its vehicles in February 2021; after the company communicated it had acquired $1.5 billion (U.S.) worth of the digital coin. A couple of months later, Tesla chose to discontinue accepting Bitcoin; with founder Elon Musk stating what numerous critics of the connection had highlighted. Bitcoin’s dependence on fossil fuels and consequences on climate change.
“We are concerned about quickly increasing use of fossil fuels for Bitcoin mining and transactions. More particularly coal, which has the worst emissions of any fuel,” Musk shared on Twitter.
There are some internet whispers that Tesla may reverse its conclusion shortly. However, Musk himself has commended the concept of cryptocurrency. He cited that Tesla intends “to use (cryptocurrency) for transactions soonest as mining transitions to more sustainable energy.”
It’s not an overstatement that it could be among the most ecologically damaging forms human beings have ever created. This is a big ‘if’ Bitcoin continues to expand at this rate. There are struggles to make cryptocurrency greener; presumably what Musk is expecting before approving it as a form of payment for Tesla.
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