Cryptocurrency
JPMorgan And Goldman Sachs Issue Bearish Warning Before Bitcoin Halving
Two of America’s largest banks are urging crypto investors to remain cautious around the upcoming Bitcoin halving, which analysts believe may not play out much like prior cycles.
In a Wednesday report, JPMorgan predicted that Bitcoin’s price will not rise following the event, and is more likely to resume declines that began earlier this month.
Could The Halving Be Bearish For Bitcoin?
The bank’s outlook remains consistent with its relatively bearish forecasts throughout the year, refusing to be swayed by growing optimism around Bitcoin spot ETFs or the halving.
“We do not expect bitcoin price increases post-halving as it has already been priced in,” wrote analysts led by Nikolaos Panigirtzoglou. “In fact, we see a downside for the bitcoin price post-halving for several reasons.”
The analyst used the price of gold as a reference point, as both assets share a similar investment thesis as a risk-off store of value and inflation hedge. On a volatility-adjusted basis, the bank argued that Bitcoin’s price should only be $45,000, meaning its current market price ($63,700) is significantly overbought.
Backing their case is a continuing long bias in Bitcoin futures open interest, and a lack of venture funding in the crypto industry this year.
“The technical picture for bitcoin is rather worrying, as we saw no rebound after the price drop on Friday and Saturday,” added Alex Kuptsikevich, FxPro’s senior market analyst, in an email to Forbes. “On the contrary, the market seems to be getting used to current prices in anticipation of a halving.”
Goldman’s Bitcoin Outlook
In a note to clients last week, Goldman Sachs acknowledged that Bitcoin’s past three halving cycles have resulted in massive price run-ups in the aftermath – though the exact time it took to reach a new al time high afterward has differed greatly.
This cycle looks even more different: Bitcoin already topped its previous cycle’s all-time high above $69,000 in March, one month before the halving even occurred.
“Caution should be taken against extrapolating the past cycles and the impact of halving, given the respective prevailing macro conditions,” analysts said.
The halving itself is due later this week, expected on April 20 at 01:44 UTC. Whether or not it results in a “buy the rumor, sell the news” event in the short term, Goldman thinks BTC’s immediate price action is hardly relevant.
“Bitcoin price performance will likely continue to be driven by the said supply-demand dynamic and continued demand for bitcoin ETFs, which combined with the self-reflexive nature of crypto markets is the primary determinant for spot price action,” the bank said.
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Cryptocurrency
Binance Founder CZ’s First Words After Receiving 4-Month Prison Sentence
Binance founder and former CEO – Changpeng Zhao a.k.a CZ – received a four-month prison sentence after pleading guilty to violating US anti-money laundering laws at the world’s largest cryptocurrency exchange.
In the first tweet following the sentencing, CZ revealed his intention to remain a passive investor and holder in the crypto industry while simultaneously highlighting the importance of compliance in the industry.
CZ Reacts
In his final tweet before beginning his four-month prison sentence, CZ expressed gratitude to his supporters, acknowledging the letters, messages, and various forms of encouragement he received.
He even went on to emphasize the importance of their support in keeping him resilient during this period.
“I will do my time, conclude this phase, and focus on the next chapter of my life (education). I will remain a passive investor (and holder) in crypto. Our industry has entered a new phase. Compliance is super important. A silver lining of this whole process is that Binance has been under the microscope. And funds are SAFU. Protect users!”
CZ resigned as Binance’s chief executive officer last November after admitting that he and the exchange he founded in 2017 had failed to comply with anti-money laundering regulations outlined in the Bank Secrecy Act.
The Sentencing
Once regarded as one of the most influential figures in the industry, CZ became the second prominent crypto leader after FTX’s Sam Bankman-Fried (SBF) to face imprisonment.
The sentence was significantly lower than the three years sought by prosecutors and marked the first instance of a CEO being imprisoned for violating the Bank Secrecy Act, a charge frequently used in recent crypto prosecutions.
Prior to his sentencing, CZ expressed his remorse to US District Judge Richard Jones, acknowledging his failure to implement an effective anti-money laundering program. He stated,
“I believe the first step of taking responsibility is to fully recognize the mistakes. Here I failed to implement an adequate anti-money laundering program. I realize now the seriousness of that mistake.”
CZ chose to surrender voluntarily to serve his sentence, which will likely be at a detention center near Seattle-Tacoma International Airport. Additionally, Binance agreed to a $4.32 billion penalty, while CZ paid a $50 million criminal fine and an additional $50 million to the US Commodity Futures Trading Commission (CFTC).
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Cryptocurrency
Bitcoin Price Recovers After Fed Announces No Rate Hike At FOMC
The Federal Reserve decided to maintain its benchmark interest rate of 5.25%% to 5.5% at the highly anticipated Federal Open Market Committee Meeting (FOMC) on Wednesday, following a fearsome 6% drawdown in Bitcoin’s price earlier that day.
Within five minutes of the announcement, Bitcoin’s price rose from $57,300 to $57,700
- Per a press release, the central bank said it also plans to slow down the rate at which it sells US Treasury securities starting in June, reducing its monthly redemption cap from $60 billion to $25 billion.
- Market participants overwhelmingly expected the Fed to maintain its interest rate at 5.25% heading into the meeting, expecting cuts to potentially take off in Q4.
- However, words from the central bank confirmed market fears that the central bank may have to keep rates higher for longer to quell nationwide price inflation, which remains stubbornly above 3%.
- “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the Fed wrote.
- The economy also remains surprisingly resilient: data compiled by Bloomberg Intelligence suggests that 81% of S&P 500 companies that have filed their Q1 earnings have beaten their first-quarter expectations.
- Bitcoin’s price is known to be influenced by central bank policy and macroeconomic liquidity conditions.
Some analysts like BitMEX co-founder Arthur Hayes believe BTC will continue to surge past $100,000 as central bank balance sheets continue to expand.
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Cryptocurrency
Polkadot Price Analysis: DOT Tumbles 7% Weekly but the Bulls May Be Staging a Comeback
Polkadot’s price has been dropping rapidly over the last couple of months and is yet to show any sign of slowing down. However, the cryptocurrency might soon begin a bullish rebound.
Technical Analysis
By TradingRage
The Daily Chart
On the daily chart, the price has been on an aggressive decline since a rejection from the $12 resistance level. The market has also broken below the bullish trendline that has been formed since October 2023.
The 200-day moving average, located around the $7 mark has also been broken down, with the price seemingly targeting the $4 support zone.
With the Relative Strength Index also showing values below 50%, the momentum is in favor of a further bearish continuation.
The 4-Hour Chart
The 4-hour chart paints a much more clear picture of the recent price action. The market is seemingly forming an ascending channel pattern at the moment.
These formations are normally considered bearish continuation patterns inside a larger downtrend.
Therefore, if the channel breaks down, the market would be more likely to crash toward the $4 support zone. On the other hand, a breakout above the channel can completely overturn the scenario, and the market could begin a bullish trend.
Therefore, the short-term fate of the market relies heavily on whether the channel is broken to the upside or downside.
Sentiment Analysis
By TradingRage
Polkadot Liquidation Heatmap
While the technical analysis of the DOT price chart suggests that we are in a clear bearish trend, the futures market data hints at a potential rebound in the short term.
This chart demonstrates the Binance DOT/USDT pair’s liquidation heatmap. It is evident that tons of liquidity were located below the $6.5 level, which the price has recently dropped below. Therefore, it could be interpreted that the demand has absorbed this supply as the market is not dropping lower anymore.
Currently, a potential liquidity pool for the price to target is located above the $7 level. As a result, the price could at least experience a short-term pullback toward this level.
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