Last week, JPMorgan
Strategist Nikolaos Panigirtzoglou wrote in a note to the big bank's clients that crypto faithful might need to wait longer for a resumption of the bull run: "The longer-term signal remains problematic, as it has yet to turn short. It would still take price declines to the $26k level before longer-term momentum would signal capitulation."
Panigirtzoglou sees medium-term fair value for Bitcoin in the $24,000 to $36,000 range, believing the May bearish move badly weakened demand from institutions, adding more resistance. He explained that the recent "boom and bust dynamics" or extreme volatility is an impediment to further institutional investment because it makes Bitcoin and Ether (ETH) especially unattractive compared to traditional gold.
JPMorgan's alert that institutions are not wholly buying the crash could be a harbinger of further losses in the short run.
Here is the rest of the week in review:
El Salvador is working on passage of a bill to adopt Bitcoin (BTC) as legal tender. President Nayib Bukele said in a videotape shown Saturday at the Bitcoin 2021 in Miami that he will submit the bill next week, which he touted as providing benefits and jobs for thousands. Lightning Network firm Zap's Jack Mallers said he is working with Bukele to implement the legislative proposal. Mallers said: "As of now, El Salvador is set to be the first bitcoin country. And the first country to make bitcoin legal tender and treat it as a world currency and have bitcoin on their reserves." The country's legislature must review the bill, and Bukele's populist party holds a firm majority. The bill's full text has not been published yet. The bill's pending approval will likely make El Salvador the first country to recognize Bitcoin as legal tender. However, it is unclear what the reform would change for the poor Central American country, where 70% of residents still lack a bank account.
Guggenheim Investments registered a new fund named the Guggenheim Active Allocation Fund that may seek investment exposure to crypto assets like Bitcoin, according to a Tuesday filing with the US Securities and Exchange Commission. The investment firm aims to list the new fund on the New York Stock Exchange under the ticker "GUG," and the fund will follow an asset-allocation strategy and a relative value-based investment strategy. The Active Allocation Fund may seek exposure to cryptocurrencies, especially Bitcoin. It would likely gain indirect exposure through financial instruments like derivatives, futures contracts, or other vehicles that invest in crypto. Guggenheim highlighted the volatile nature of crypto, noting that "it is a highly speculative asset." The filing said the new fund could hold a varying percentage in crypto or may hold none. The new fund registration came after Guggenheim filed in November to allow its Macro Opportunities Fund gain exposure to Bitcoin.
Crypto prices edged up to $1.632 trillion this week, as the sector remains range-bound. For the majors, all coins except Uniswap (UNI) and Bitcoin bounced back. In the top 100, the biggest losers were Polygon (MATIC), down 19%, Helium (HNT), down 15%, and Horizen (ZEN), down 14%. The biggest gainers were Theta Fuel (TFUEL), up 45%, Solana (SOL), up 44%, and Curve DAO Token (CRV), up 40%. Next week traders will see if Bitcoin breaks through the key $30,000 or $40,000 levels.
The author owns a small amount of BTC.
