Leading crypto Bitcoin is acting without momentum amid the uncertainty in the markets. However, JPMorgan strategists argue that BTC is trading well below its true value. Meanwhile, popular analyst Michael van de Poppe shares his latest technical analysis for Bitcoin.
JPMorgan: Bitcoin needs to be traded at $45,000
The digital revolution continues to reshape the financial world. In such an environment, Bitcoin (BTC) emerged as a formidable competitor challenging the centuries-old dominance of gold as a store of value and hedge against inflation. However, JPMorgan strategists say that the current price of Bitcoin does not reflect its true potential. Also, strategists suggest that BTC should be trading significantly higher. They rely on the price of gold and the assumption that many investors view the two assets as interchangeable.
JPMorgan analysts point out that with gold hovering just under $2,000, Bitcoin should ideally trade around $45,000. Bitcoin’s current trading price of $26,773 is almost 70% lower than the level suggested by strategists. This significant disparity means that either Bitcoin is undervalued or gold is overvalued, assuming the two assets are perceived by investors as truly alternatives.
Catalyst on the horizon: Bitcoin halving
However, the notion that Bitcoin and gold serve as equal stores of value may not convince everyone. Bitcoin, which has only existed for 14 years, pales in comparison to gold, which has played this role for centuries. As a result, institutional investors predominantly prefer gold as a safe-haven asset. BTC, on the other hand, attracts the attention of individual investors.
JPMorgan strategists also highlight another potential factor that could affect Bitcoin’s price in the future. This is a halving event, as Cryptokoin.com readers know. The Bitcoin halving occurs roughly every four years. A halving is a programmed event that reduces the rate at which new Bitcoins are created and entered the market. This event reduces the supply of new coins, which could potentially affect Bitcoin’s price. The halving event also halves the number of tokens miners receive to process transactions and secure the Blockchain.
The next halving event is expected to occur in April or May of next year. According to estimates, this will double the cost of mining a Bitcoin. Thus, it will raise BTC to around $40,000. Decreased supply and rising mining costs could potentially push the price of Bitcoin up, although the exact outcome is uncertain.
BTC will likely hit above $38,000 soon!
Leading crypto analyst Michael van de Poppe predicts that BTC could rise above $38,000 in the coming weeks. According to the analyst, the latest FOMC meeting minutes hinted at the possibility of interest rate pauses. He predicts that pauses could happen at the next meeting or the one after that, which could potentially feed the crypto market. This is because a pause in interest rates is often viewed as a positive for market sentiment.
Weekly chart for BTC / Source: TradingViewMeanwhile, BTC is struggling to surpass the key $30,000 resistance level. Van de Poppe highlights the importance of the 200-week Moving Average (MA) and the 200-week Exponential Moving Average (EMA) below the price of BTC. Accordingly, he states that it is very important to follow these levels.
In his analysis, he states that if BTC fails to close this week above these levels, a quick recovery will be necessary for BTC to climb to $38.8k. The pace of the rise will be a key factor in determining potential price action. On the other hand, failure to break above the two lines will likely cause BTC to drop to $20,000. In addition, the analyst also discusses the effect of dollar strength on BTC. Macroeconomically, a strong dollar is not conducive to BTC. Van de Poppe talks about the possibility of a relief rally in the Dollar Index. However, he states that it is approaching an important resistance level and remains in a medium-term downtrend.
If the US index breaks above this resistance, it is possible for BTC to see a downside move. Thus, a drop towards the $20,000 mark is likely. However, the outcome will depend on upcoming fundamental market data for the next few weeks, which the analyst believes will be bearish for the dollar and potentially beneficial for BTC.
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