- Nikolaos Panigirtzoglou is convinced that worst is behind us in Bitcoin.
- He agreed that there recently have been positive news in crypto market.
- Price of a Bitcoin has declined nearly 17% in less than two months.
A JPMorgan analyst is convinced that the worst is behind us as far as the ongoing decline in the price of a Bitcoin is concerned.
Bitcoin is not the only one taking a hit
Nikolaos Panigirtzoglou attributes recent weakness in the world’s largest cryptocurrency to a bunch of long positions that were liquidated as positive news, including the pending approval of a Spot Bitcoin ETF continued to fade but added:
This unwinding of long positions appears to be at its end phase rather than its beginning. As a result, we see limited downside for crypto markets over the near term.
Note that Bitcoin is not the only risk-on asset that has had a tough few weeks. China-related concerns and higher real yields in the U.S. have been hitting the tech space at large.
Nasdaq Composite is now down about 7.0% versus its recent high.
Why are investors staying on the sidelines?
Panigirtzoglou agrees that there has been positive news in the crypto market including PayPal Holdings introducing its own dollar-pegged stablecoin (read more) and the launch of “Base” by Coinbase Global Inc.
But investors are staying on the sidelines and waiting for regulatory clarity partly because the Securities & Exchange Commission has appealed the recent decision in Ripple’s favour, as per his research note today.
Appeal could result in a trial with outcome not expected until next year, inducing a new round of legal uncertainty for crypto and making them sensitive to any mid-process news.
On Friday, Fed Chair Powell also said at the Jackson Hole symposium that rates may go even higher from here and signalled no near-term intent of cutting rates which doesn’t bode well for the cryptocurrencies either.