Bitcoin is “overbought” and represents an unfavorable scenario for the gold price

Institutional investors could be the only thing driving the price of Bitcoin (BTC) up, according to a new report by JPMorgan Chase.

Quoted in December 18 comments from Bloomberg, The strategists, led by Nikolaos Panigirtzoglou, added up-to-date predictions on the role of institutions in the future of Bitcoin.

JPMorgan: Bitcoin “overbought”

According to JPMorgan The large inflows seen this month must continue to avoid a price correction.

Bitcoin is “overbought” and represents an unfavorable scenario for the gold price
Bitcoin is “overbought” and represents an unfavorable scenario for the gold price

As Cointelegraph reported, Theories associated with the recent price hikes include institutional investors buying through OTC market deals that absorb the supply available. That was called a Liquidity crisiswhich will only intensify over time as another analyst noted this week The cycle could fuel Bitcoin’s bull run indefinitely.

For JPMorgan, however Buyers need to keep pace to avoid the opposite scenario: losses.

In memory of GrayscaleThe company, which now manages $ 13.1 billion worth of crypto assets, has established it The large size of the entries means that “they are too large to allow a position to lose momentum traders to create persistent negative price momentum”..

Despite this, Bitcoin was still “overbought” at the current price level near $ 24,000. when the Relative Strength Index (RSI) rose above 70. A subsequent drop in prices on Monday brought the RSI below this threshold.

More pressure on the gold price in the future

Previously, Panigirtzoglou suggested this Bitcoin could benefit from an injection of $ 600 billion in institutional funding After major insurance company MassMutual announced a $ 100 million allocation.

Daily chart of gold vs. the BTC / USD pair. Source: trade view

Building on previous warnings that gold would now lose its place in favor of Bitcoin, The latest findings identify a new “trend” formed by gray levels. Exposure to Bitcoin could include the purchase of one unit of grayscale on the sale of three units of the SPDR Gold Trust.

“If this thesis turns out to be correct in the medium and long term, The gold price would suffer an unfavorable structural flow in the coming years“they added.

Correlation of Bitcoin vs. USD, Gold, VIX, S P500. Source: Digital Assets Data

The correlation between gold and bitcoin has declined since October when bitcoin hit new all-time highs. Gold saw a rejection at $ 1,900 on Monday after prolonging a modest rebound from lows below $ 1,800.

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