Panigirtzoglou underscored the following details about the ongoing phenomenon in the crypto market :
- The analyst believes that the ongoing revival in the cryptocurrency market amidst the prevailing bearing market tendencies since a month could slow down.
- The swift decline of stablecoins in the entire crypto market could severely limit any further upside for crypto markets.
- JP Morgan considers stablecoins as dry powder or cash on the sidelines that could be utilized to buy various cryptocurrencies.
- The bank pointed out the fact that the sanctions imposed on Russia amidst the
Ukrainecrisis, were expected to increase the usage of cryptocurrencies manifold in future due to the limitations of the traditional banking system and the ability of cryptocurrencies to surpass it.
- The imposition of sanctions were even followed by a 30 percent price surge of
Bitcoin and etherin March, since its February slump.
- The price rise of Bitcoin and Ether was marked by a combination of short covering and bitcoin fund inflows that sustained the rally, with $210 million flowing into the Purpose Bitcoin ETF since March 7.
- The short covering was higher for
Ethereumthat helped to push the bank’s position proxy based on CME ethereum futures to overbought territory.
- Short covering refers to buying back borrowed securities in order to close out an open short position at a profit or loss.
- However, in spite of these developments the bank believes that the recent decrease of the share of stablecoins signals a slowdown of rallying in the crypto market.
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