JPMorgan analyst warned in the latest research report on Thursday that Bitcoin is still in an “overbought zone” and predicts a downward trend after the halving.
The fourth halving of Bitcoin, which is expected to occur on April 20th at around 9 am, has seen increasing bearish sentiment due to recent dampened expectations of interest rate cuts by the Federal Reserve and escalating tensions in the Middle East.
For example, earlier at around 10 am, Bitcoin plummeted to $59,600, a decrease of nearly 6.4% within four hours, after reports of Israel launching missile attacks on Iran. As of the time of writing, it has temporarily rebounded to $61,758.
JPMorgan predicts a decline in Bitcoin after the halving. The market has mixed views on the future direction of Bitcoin post-halving. According to Coindesk, JPMorgan, one of the largest commercial banks in the United States, expects a downward trend for BTC after the halving. This is based on their analysis of open interest in Bitcoin futures contracts, which indicates that BTC is still in an “overbought zone.”
Similarly, analysts from Deutsche Bank also predict that Bitcoin will not rise after the halving but will remain at high levels, as the price of Bitcoin has already priced in the positive expectations of the halving event.
Data shows that the funding rate for BTC turned negative and reached its lowest level in over six months on April 15th and April 18th, indicating a decrease in bullish interest. During the period from April 12th to April 18th, Bitcoin’s price dropped by as much as 13.5%.
Some traders also analyze that the downward trend of Bitcoin may continue until early June, stating that “Bitcoin’s closing price yesterday was below the 50-day moving average and below the low point on March 20th, confirming its mid-term high point on March 14th. The low point may occur around June 5th.”
Arthur Hayes warns of a “sharp decline” in Bitcoin before and after the halving and advises against any trading until May.