Fundstrat has released a statement warning crypto traders not to make risky investments over the next couple of days. According to their crypto analysists, there are concerns about mounting leverage, which could result in a further dip in the price of Bitcoin and other digital currencies.
As per their caution, the BTC price could start plummeting as early as Sunday, possibly going under $30,000. At the moment of writing, Bitcoin hovers above 31k, but Fundstrat’s analysts are worried it could change before the end of the month.
“We think it’s possible that the selling we’ve seen over the last day or so is related to concerns over leverage and counterparty risk of some lenders,”said David Grider of Fundstrat
The reason behind their concern is that novice traders might decide to start selling their crypto assets in an effort to get at least something out of their investments. Apart from being tired of negative volatility, low-scale crypto investors might be in a need of money as June is fast approaching to its end.
Bitcoin Slips Toward 30k
Bitcoin is down over 50% from its peak reached two months ago. Its price is just above $31,000, where it’s been for a while now. Although we did see BTC going under 30k for a brief period, the cryptocurrency has been in a trading range between 30 and 40k.
Daily price changes can be induced by the traders’ behavior, but something else has really pushed Bitcoin to a bearish path. It all started with Tesla’s decision to stop accepting Bitcoin as a payment method, followed by China’s clampdown on cryptocurrencies.
Most recently, the United States has started working on a tighter cryptocurrency policy. That could lead to making crypto trading more difficult in the future (and less profitable).
Better Days on the Horizon?
Analysts from JPMorgan Chase & Co. feel more optimistic about the future of Bitcoin. According to them, there might be some short-term risks, but the market has already started showing some good signs.
“Cryptocurrency market shows signs that it is not yet healthy, it does also appear to be beginning the process of healing,” JPMorgan analysts wrote on Friday.
According to them, the most recent cryptocurrency sellout was a result of investors trying to cover their losses, which goes in line with what Fundstrat analysts said. However, unlike the people from Fundstrat, JPMorgan analysts seem more optimistic about the market.
As a reminder, JPMorgan has always been bullish about Bitcoin, suggesting it could even reach the price of $146,000.