Despite volatility continuing to shake the crypto market, Bitcoin formed a range between $28,000 and $32,000 last week. But the latest economic warning from JPMorgan Chase CEO Jamie Dimon is adding to the risk-aversion sentiment. After attempting to break the $32,000 level in the past 24 hours, Bitcoin is down 5% on a daily basis and is trading below the key psychological threshold of $30,000.
JPMorgan CEO pissed off investors
For most of May, Bitcoin closely followed the sentiment in the US stock market, with Jamie, JPMorgan Chase CEO, on Wednesday. On a stern warning from Dimon, Bitcoin is still intact as it pulls back along with US stocks. Speaking at a financial conference in New York, Dimon said, “I said there were storm clouds, but I’m changing my mind… it’s a hurricane. Better prepare yourself… JPMorgan prepares ourselves and we will be very conservative about our balance sheet,” he said, adding:
While economic conditions look “good” at the moment, is it a “small” hurricane or It is still unclear whether it will be “Super Storm of Sandy”. It’s a little sunny right now, things are going well, everybody thinks the Fed can handle it. This hurricane is right there, down the road, heading towards us.
The two most important risks on Dimon’s radar are the Fed’s monetary tightening (QT), which will begin on June 1, and the impact of the war in Ukraine on commodities. “We’ve never encountered a QT like this, so we’re seeing something history books could write about,” Dimon said. Wars are getting worse, the economy is going down with unintended consequences. “We are not taking the necessary measures to protect Europe from what will happen to oil in the short term,” he said. Dimon thinks oil will see $150 or $175 a barrel.
Negative sentiment looms for Wall Street and Bitcoin
OANDA senior market analyst Edward Moya said the JPMorgan Chase CEO’s message turned Wall Street sentiment bearish. Moya said on Wednesday:
The mood on Wall Street is turning negative as the economy enters a rough patch. JPMorgan CEO Dimon’s comments that the economy is heading for a ‘hurricane’ are also putting pressure on sentiment. U.S. stocks turned negative as expectations rose that the Fed won’t loosen interest rates after both solid U.S. economic data and the Bank of Canada’s aggressive rate hike talk. Everyone expects economic activity to soften over the next few years. Especially since inflation risks remained high and the Fed began shrinking its $8.9 trillion balance sheet.
Edward Moya: To understand Bitcoin (BTC) institutional investors can be looked at
According to Moya, traders are looking for Bitcoin It can look to institutional investors to determine if the price is bottoming out. “Bitcoin continues to follow what happens on Wall Street, but that may change if more institutional investors believe crypto bottoming has been made,” said OANDA senior market analyst Edward Moya. BTC is coming out of a consolidation period. Still, the risk of a quick pullback cannot be ruled out, said Katie Stockton, founder and managing partner of Fairlead Strategies.
Stockton wrote in a note this week, “Short-term momentum is positive… supporting test of 50-day MA ($34.8k). “We maintain a medium-term bearish trend, but note that the medium-term momentum is negative and the price remains below the daily cloud.” Stockton added that long-term support is around $27,200 and long-term resistance is around $42,600.
Cryptocurrency funds outflow are observed
Kriptokoin.com from fund manager CoinShares The data shows that crypto funds recorded $87 million in inflows versus $141 million outflows last week. Drawing attention to this data, GlobalBlock analyst Marcus Sotiriou uses the following statements:
As it continues to be the most popular crypto investment for institutions in the current macro environment, Bitcoin dominated the entries, while Ethereum saw $ 11.6 million exits. This coincides with Ethereum performing worse than Bitcoin last week, suggesting that it is selling assets that investors think are further along the risk curve.
However, the factor that Bitcoin miners can sell their BTC to meet their profit margins amid a falling price does not go unnoticed. “Miners can start selling their holdings on the open market,” Compass Mining said on Wednesday, citing data from CoinMetrics. Saying that after the last drop in price, miners “feel the pain”, Compass Mining states that the downward difficulty adjustment also forces the miners. He says this shows that miners are pretty tight on profits.
