Bitcoin is on a downward spiral as its price continues decreasing.
The last time JPMorgan strategist Nikolaos Panigirtzoglou witnessed such bearish movements was when buyers sold their BTC coins to prevent deeper crypto slumps.
Bitcoin’s price is currently hovering above the $55,300 mark from its $60,300 price last April 18. It might seem normal for the highly-volatile crypto, but it’s been spiraling down for over a week now since it peaked at its ATH of $64,700 on April 14.
This worries analysts, including Panigirtzoglou, about the coin’s future.
Panigirtzoglou said in a statement that momentum signals could collapse if the crypto can’t break beyond the $60,000-mark soon. This can have negative effects throughout the crypto community and can lower down the price of other coins like Ethereum and XRP.
Strategists compare BTC’s erratic movements similar to what happened in mid-January and February this year and November last year, which was caused by steep liquidation. The price drop can, however, stop if these liquidations settle to a standstill.
Bitcoin should also regain its previous strong stand soon, especially that it’s still at an elevated level so that momentum signals won’t naturally decay. This is vital for the crypto as mass adoption will slow down, and BTC will become more bearish if this happens.
It’s also worth noting that the overall demand for BTC was still sky-high during those three previous instances. This then enabled Bitcoin to easily go beyond the key thresholds and yield more momentum from investors and traders.
Panigirtzoglou said that there is a good chance that the three previous episodes can happen again because of the similar price movements and community reactions.
But the chances of it happening is lower compared to the previous incidents because of today’s faster momentum decay. He also added that price slumps are harder to reverse today because of the weaker flow of Bitcoin funds.
Despite BTC’s seemingly overwhelming bearish trend, the crypto is still up by around 90% over the past year from its $28,000 price at the end of 2020.
1 BTC is equivalent to $55,520 as of writing.