The bank has determined that bitcoin is still overbought based on its study of open interest in bitcoin futures.
According to a study report released on Wednesday by JPMorgan, a Wall Street powerhouse, the price of bitcoin (BTC) is expected to decline after the reward halving. This quadrennial event reduces the pace of bitcoin supply growth and is expected to take place around April 19–20.
The bank’s study of open interest in bitcoin futures indicates that the market is still in overbought circumstances, which means that the world’s biggest cryptocurrency might see downside after the halving.
In addition, even after adjusting for volatility, the bank estimates that the cryptocurrency’s manufacturing cost will be $42,000 after the halving, but its current price of around $61,200 is more than gold’s price of $45,000. For a long time, the manufacturing cost of bitcoin has served as a floor for bitcoin pricing.
The mining industry will be most significantly affected by the halving. Analysts led by Nikolaos Panigirtzoglou wrote, “As difficult bitcoin miners exit the bitcoin network, we anticipate a substantial decrease in the hashrate and consolidation among bitcoin miners, with publicly traded bitcoin miners keeping the largest share.”
Also Read: Winklevoss Slams BBC for Attempting to Sell Bitcoin for UK Soccer
