CoinLoan Weekly: Budding recovery, $38K for BTC
After nine weeks in the red, BTC seemed to reclaim support. From under $29,500, it rose above $30,000 on Wednesday, May 25, and beyond $30,750 on Monday, May 30.
Nevertheless, the market still grappled with extreme fear. On Friday, May 27, it closed with a 4.1% loss, diverging from the U.S. stocks as both Nasdaq and Tesla were green. Yet the BTC charts show resistance at $30,500, and a daily close above this level would be a strong sign of recovery.
As of now, BTC is trading at $30,869.12, with a 24-hour gain of +5.9% and a 7-day change of +1.7%.
Ether’s rise on Monday, May 30, followed a steep fall – on Saturday, May 28, it plunged to $1,724.88. Unlike BTC, the cryptocurrency failed to surpass its Wednesday’s peak ($2,016.43 on May 25). The next day brought the sharpest drop for the week – ETH fell below $1,800 for the second time this month.
On Friday, May 27, ETH-tracked futures took a hit due to weak on-chain data. They accounted for nearly half of all liquidations. Those losses were unusual, as ETH typically sees lower liquidations than BTC on average days.
As of this writing, ETH is trading at $1,936.38, with 24-hour growth of +7.8% and a 7-day drop of -5.4%.
Ripple is perking up after another week of losses. Its price see-sawed between $0.395 and $0.415 until Friday, May 27, when it slid to $0.380549. Now, XRP is headed back towards the peak of $0.415084 reached on Wednesday, May 25.
Some analysts see possible signs of bullish divergence, which shows that bears are losing power. The company is also exploring the possibility of an IPO once the SEC vs. Ripple lawsuit ends. Meanwhile, XRP whales have been scooping up the altcoin.
As of now, XRP is trading at $0.403739, with a 24-hour change of +4.4% and a 7-day slide of -4.4%.
$38K is BTC’s fair price, according to JPMorgan
Despite Bitcoin’s crash below $30,000, JPMorgan’s outlook on the coin is relatively upbeat. According to the bank, Terra’s downfall has not upset the venture capital market, so crypto investors should not despair.
The investors’ note, released on Wednesday, May 25, cites $38,000 as BTC’s fair price. The authors explain, “The past month’s crypto market correction looks more like capitulation relative to last January/February and going forward we see upside for Bitcoin and crypto markets more generally.”
This is the second investors’ note suggesting $38,000 – it was first mentioned in February, when BTC was at around $43,000. Now, the estimation means the coin is undervalued by roughly 28%.
What’s more, JPMorgan deems crypto a better alternative asset than real estate, which puts it on par with hedge funds. The note cites a lack of evidence about the weakening of VC funding. Of the $25 billion invested year-to-date, nearly “$4 billion came after Terra”. The analysts expect the trend to persist and prevent a prolonged crypto winter.
Meanwhile, Andreessen Horowitz, a Silicon Valley firm, has announced its fourth $4.5 billion fund for supporting crypto and blockchain businesses. Partners Chris Dixon and Arianna Simpson compared the long-term benefits to “the next major computing cycle,” following mobile computing in the early 2000s, the internet in the 1990s, and PCs in the 1980s.
According to CB Insights, investment into private companies is also at all-time highs. In 2020, blockchain start-ups attracted eight times more venture capital than a year prior.
Despite its CEO’s aversion to crypto, JPMorgan has adopted a pragmatic approach. It is currently exploring blockchain for collateral settlements as part of Wall Street experimentation. In early 2022, the giant became the first major bank to enter the Metaverse.