JPMorgan Sees BTC As Overbought, Taking A Chunk Out Of Gold Too

JPMorgan Chase, the finance giant, has recently revealed that institutional investors could be the only thing pushing up Bitcoin’s price at this moment. As revealed by Bloomberg, Nikolaos Panigirtzoglou and his team of strategists feel the same, adding to the forecasts made regarding the institutional players’ role within the future of Bitcoin (BTC).

Potentially Continuously Gaining Momentum

JPMorgan stands convinced that the only way the month’s large scale inflows can keep its momentum is to continue with it, otherwise, the price correction will come with a vengeance.

The ongoing theory to the recent ATH and general bull run for Bitcoin is the inclusion of institutional players in the mix. These investors buy through OTC trades, which promptly suck up the entire available supply, causing what’s called a liquidity crisis. In time, this could only increase, and one analyst went as far as to say the cycle itself could fuel Bitcoin’s bull run indefinitely.

I keep repeating this, but a #Bitcoin liquidity crisis is playing out in front of our eyes.#Bitcoin removed from Exchanges is continuing to drop.

Another $700 million removed off exchanges this last week, more people are stacking. pic.twitter.com/yhLCQyqPuX

— Danny Scott ⚡ (@CoinCornerDanny) December 10, 2020

JPMorgan: Keep Buying To Keep Making Money

JPMorgan isn’t that convinced, and stated that buyers need to keep buying Bitcoin, otherwise a large-scale correction could occur.

As for Grayscale, currently boasting $13.1 billion in crypto assets under management, it had its own take, as well. Grayscale’s logic is that the sheer scale of the inflows is just too big to allow momentum traders the chance to unwind, which would see a sustained negative price dynamic in turn.

However, the currency is still at “overbought” ranges within its current price levels of around $14,000. As it stands now, the relative price index, or RSI, stands above 70, with a price dip on Monday, bringing it back below this threshold.

Bitcoin Eating Gold’s Share

Panigirtzoglou, alongside others, had already suggested in the past that Bitcoin could stand to benefit from a cash injection by the tune of $600 billion through institutional uptake. This came after MassMutual, the insurance giant, revealed that it had allocated $100 million in cryptocurrencies.

With previous warnings used as a base, it’s been warned that Bitcoin will eventually usurp gold. The latest findings support this, with Grayscale discovering a new trend. You could gain Bitcoin exposure by selling three units of SPDR Gold Trust and buying one unit of Grayscale. The researchers warned that a structural flow headwind would cause gold to suffer should this medium-to-longer term thesis prove itself effective.

Bitcoin and gold’s correlation levels have seen a significant decrease since Bitcoin started to rally into new all-time highs. Gold itself saw a rejection on Monday at $19,000, but saw a modest recovery with lows under the $1,800 threshold.