Experts are currently attempting to forecast Bitcoin's performance as the cryptocurrency hovers around the $30,000 mark. A team from JPMorgan, including Josh Younger and Veronica Mejia Postamante, noted in a memo on Friday that making near-term predictions is a "challenge," while David Grider from Fundstrat Global Advisors recommended reducing exposure risks to the cryptocurrency.
The JPMorgan team stated that blockchain data indicates recent cryptocurrency sales were made to cover losses and "there is likely still much adjustment needed through the market." The price of Bitcoin has halved from its peak near $65,000 in April, affected by crackdowns on cryptocurrency in China, increased regulatory scrutiny elsewhere, and concerns over the energy consumption of servers supporting the virtual currency.
The potential for reducing emergency stimulus amid the recovery from the pandemic has also emerged as a possible obstacle for most speculative investments.
**Increased Mining Costs for Bitcoin**
Despite this, strategists at JPMorgan pointed to stability in the Bitcoin futures market as a positive factor, alongside the potential for rising production costs, driven by a Chinese campaign to move Bitcoin mining overseas.
Some researchers believe that marginal production costs play a critical role in Bitcoin prices; thus, while "the cryptocurrency market shows signs of not being healthy yet, it also seems to have begun a recovery process," as noted by some researchers.
The largest cryptocurrency dropped by 6% to $30,296 on Saturday after approximately an 8% decline on Friday. Other cryptocurrencies were also under pressure, with Ethereum dropping over 5%.
Some technical analysts view the $30,000 level as a resistance point for Bitcoin; should it stabilize below this mark, it may open the way for a downturn to $20,000. Grider, a senior analyst for crypto assets at Fundstrat, indicated that large short positions could form again on the Bitfinex platform, noting that the last time a similar situation occurred, negative news from China led to price reductions.
