Daily Market Update - May 29, 2020 - JP Morgan Switch Gears On BTC, Investors Move BTC off Exchanges
$BTC 24 Hour High $9,573.67 $BTC 24 Hour Low $9,379.34 $BTC -0.32%
Market Cap $173,305,911,313 USD ^ 18,388,731 BTC
Volume (24h) $34,650,386,705 USD ^ 3,676,601 BTC
Circulating Supply 18,388,731 BTC
Investors move Bitcoin from Exchanges Signalling major Bullrun
From Cointelegraph- In 2019, the price of Bitcoin surged from $3,150 to $14,000 when the inflow of BTC into exchanges plunged, and it just happened again. Leading crypto exchanges are holding around 1.36 million Bitcoin (BTC), worth around $12,880,000,000. The last time major trading firms had such low Bitcoin reserves, the price of the dominant cryptocurrency surged from $3,150 to $14,000.
Market data indicates a growing number of investors are moving their Bitcoin holdings out of exchanges, showing that traders have no intention of selling BTC at the current price of $9,400.
In the first quarter of last year, the price of Bitcoin ranged between $3,150 and $4,500 for nearly four months. When the inflow of BTC from exchanges started to decline, the cryptocurrency began to rally. Within three months, BTC increased from $4,000 to $14,000, recording a 250% price surge.
At $9,500, Bitcoin is seeing the same BTC inflow volume into exchanges seen in early 2019. Fewer traders are depositing Bitcoin to trading platforms, which shows investors have no interest in risking their BTC to sell in the $9,500 to $10,000 range.
The 12-month low inflow of BTC into top cryptocurrency exchanges coincides with long-term indicators signaling the start of a new uptrend. Macro indicators like the golden cross and the Puell Multiple show that Bitcoin is on the verge of a major bull run as seen at the start of 2019.
The Puell Multiple is a metric that considers the circulating supply by looking into miner revenue to measure if BTC is overbought or oversold. Currently, the Puell Multiple of BTC is hovering at 0.4. In mid-December 2019, when Bitcoin was at $3,150, it dropped to as low as 0.3. https://www.lookintobitcoin.com/charts/puell-multiple/
The supply-focused metric shows Bitcoin could see another minor pullback in the short term. But in the short to medium-term, Bitcoin is expected to see a sizable rally.
JP Morgan About Face on Bitcoin
After years of being bearish on Bitcoin, the largest bank in the United States is now changing its tune about the world’s leading cryptocurrency.
The latest Bitcoin analysis from JPMorgan is circulating on Twitter, dated May 22nd. The report from research analyst Nikolaos Panigirtzoglou looks at the intrinsic value of Bitcoin by treating it as a commodity and basing the price on the marginal cost of producing BTC.
According to the report, Bitcoin is trading “25% below what the intrinsic price would be” following the halving event, which reduced block rewards from 12.5 BTC to 6.25 BTC.
Based on Bitcoin’s price when the report was published, JPMorgan placed BTC’s intrinsic value at $11,593.
JPMorgan has been historically bearish on the top cryptocurrency. Last year, analysts at the investment bank said Bitcoin had topped its intrinsic value after the price rose above marginal cost. Earlier this year, analysts at JPMorgan believed that Bitcoin had some downside risks, as reported by Bloomberg.
In September of 2017, chief executive Jamie Dimon said he would fire any employees who was caught trading BTC because it was both stupid and against the company rules.
JPMorgan’s new report and apparent shift in Bitcoin sentiment comes after the bank onboarded crypto exchanges Coinbase and Gemini as customers, marking a potential end to the bank’s anti-crypto era.