Over the past two weeks, Bitcoin (BTC) and the rest of the cryptocurrency market have rapidly rallied from their previous deep lows. A large portion of the weeks-long correction has now been erased, causing a major shift in market sentiment.
While many Bitcoiners are daring to look back at the all-time high of around $74,000 hit in March, JPMorgan analysts are less confident in the short term.
Cryptocurrency recovery is not the beginning of a new trend
Analysts at US banking giant JPMorgan, led by managing director Nikolaos Benigirtzoglou, expressed their pessimistic view on the current state of the cryptocurrency market in a report released on Thursday.
Analysts predict that any crypto price rise from this point will likely be “temporary and strategic.” This means that the increases are likely to be short-lived and not the start of a long-term uptrend.
JPMorgan compares Bitcoin to gold by taking into account its volatility. They argue that Bitcoin’s price should be around $53,000 to match the price of gold. According to the analysts, the difference between the current price of Bitcoin and the volatility-adjusted price of gold indicates “mean reversion around the zero line, limiting the long-term upside potential for Bitcoin.”
Finally, the report takes a closer look at the potential impact of a second Donald Trump presidency in the US on gold and Bitcoin. Analysts say a Republican victory could be beneficial for both assets.
Trump has often spoken positively about the cryptocurrency industry in recent months and made all sorts of promises to boost the industry in the United States.
Additionally, Trump’s potential trade policy could lead to increased diversification into gold by emerging market central banks, particularly the People’s Bank of China.
Bitcoin at highest price in a month
Less than two weeks ago, JPMorgan experts already shared their predictions that they expect Bitcoin and the cryptocurrency market to rebound in August. This rebound has come earlier than expected, as the price has risen significantly since then.
At that time, Bitcoin was still around $57,000. Since then, Bitcoin has been on an impressive path. Last Friday, Bitcoin surged above $67,000 for the first time in over a month. A new high was set last night at around $67,600.
Only time will tell how sustainable this price rally can be. If Bitcoin corrects, $65,000 looks like an important support to watch, according to Leading cryptocurrency analyst Rekt Capital.
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