Connect with us

Bitcoin

3 Biggest Bitcoin Takeaways from JPMorgan’s Q3 Earnings

Published

3 Monaten ago

on



JPMorgan is not a Bitcoin indicator. But the American banking giant’s third-quarter earnings report is full of anecdotes that may influence the cryptocurrency’s future outlook – in one way or another.

Background

The JPMorgan earnings showed an increase in profits by about 4 percent from a year ago. The WSJ reported the outcome as “surprise,” stating that the bank’s return to pre-pandemic levels baffled earlier Wall Street estimations. JPMorgan somewhat represents the health of the US economy, which remains in recession thanks to coronavirus.

However, it was not the consumer business that upped JPMorgan’s profits. The bank made its money from its corporate and investment wing. The gains surged by about 25 percent as companies rushed to secure cash, refinance debt, and dump stocks to offset the recession.

The Three Bitcoin Takeaways

#1 Loan Defaults

JPMorgan marked down the amount of money it had reserved to cover bad loans–from $10.47 billion in the second quarter to $611 million in the third. It showed that the bank believes it can handle a wave of soured lendings should it come. Meanwhile, it is also a vital signal of a sharp economic recovery.

For Bitcoin, it is good news. JPMorgan is telling the whole world that the worst for the US economy is behind. That should mean a continued upside run across the riskier assets as investors hunt for better yields away from cash and bond markets. Bitcoin has fared better under such fundamentals so far in 2020.

#2 Stimulus Package

JPMorgan CEO Jamie Dimon noted that the US government is the most significant catalyst behind US economic recovery. In March, after the coronavirus-led lockdown, Congress passed a $2 trillion stimulus package that benefited the American households and pandemic-hit businesses and sectors.

While most of that money now stands spent, the policymakers are discussing the second round of stimulus. Mr. Dimon believes that a “good, well-designed stimulus package will simply increase the chance” of getting “better outcomes.” He added that “there is so much uncertainty” around the deal that they cannot predict a “definite” outcome.

Bitcoin’s bullish bias is also at an impasse with the delay in the second stimulus deal.

Bitcoin has failed to close above $12,000 on stimulus uncertainty. Source: BTCUSD on TradingView.com

As earlier reported, the cryptocurrency surged by more than 200 percent on fears of a rising fiscal deficit and devalued US dollar caused by the relief. That prompted companies like Square and MicroStrategy and billionaire hedge fund manager Paul Tudor Jones to offload a portion of their cash reserves to purchase Bitcoin.

JPMorgan’s relaxed stance showed that–deep inside–it expects a stimulus deal to protect it from loan defaults. It is the question of when.

#3 JPMorgan Warnings

Mr. Dimon did leave a word of caution behind. He claimed that JPMorgan has near $34 billion to secure itself from loan losses. But if the recovery stalls–under the repercussions of a delayed stimulus or a renewed resurgence in coronavirus infections–then the bank would need another $20 billion in cash reserves.

That should also pause or reverse the ongoing Bitcoin rally. When stocks come under pressure, investors attempt to dump their crypto holdings to generate cash, as they did in March 2020.

BTC/USD was trading at 11,403 at the time of this writing, up 58.48 percent on a year-to-date timeframe.



Source link

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Deine E-Mail-Adresse wird nicht veröffentlicht. Erforderliche Felder sind mit * markiert.

Bitcoin

If History Rhymes, This Indicator Suggests Bitcoin May See a Parabolic Explosion

Published

8 Minuten ago

on

Dezember 29, 2020

By

  • Bitcoin has seen some mixed price action as of late, with bulls being unable to take control of its trend in the time following its rally up to $28,500
  • The rejection here was quite intense, and it has yet to show any signs of strength in the time following this occurrence
  • The fact that bulls have guarded against any deeper drawback is positive because it invalidates the possibility that this recent high is a blow-off top
  • One trader is now noting that there is an incredibly bullish indicator that is flashing for Bitcoin
  • He points to the cryptocurrency’s monthly RSI, noting that a monthly close above a specific level that it is nearing is historically followed by parabolic moves higher
  • In the past, these movements have had an average return of 1,010%, but their size and length seem to diminish with time

Bitcoin and the entire crypto market have declined over the past 12 hours, which appears to be the direct result of the pressure that XRP is placing on the market due to its latest selloff.

Where the market trends in the mid-term likely won’t depend on XRP, which means that this latest round of selling pressure may mark a knee-jerk reaction from investors.

One analyst is noting that Bitcoin’s monthly RSI is flashing an incredibly bullish sign for where BTC trends next.

Bitcoin Struggles to Gain Momentum Following $28,500 Rejection

At the time of writing, Bitcoin is trading down just over 1% at its current price of $26,700.

The crypto has been trading between the upper-$26,000 region and the lower-$27,000 region throughout the past few days.

It has yet to garner enough buy-side support to break above the heavy resistance laced throughout the lower-$28,000 region. For now, this peak could mark a blow-off top.

Indicator Suggests BTC is About to Go Parabolic

One trader explained in a recent tweet that Bitcoin could be on the cusp of seeing a parabolic move higher in the days and weeks ahead.

He points to the cryptocurrency’s monthly RSI as an indicator for this possibility.

“BTC – Monthly RSI. Monthly candle is about to close above 80. When this happens, bullish trend continues, with an avg. return of 1010.87%. Each cycle is shorter.”

Bitcoin

Image Courtesy of il Capo of Crypto. Source: BTCUSD on TradingView.

The coming few days should shed light on Bitcoin’s trend, as continued weakness could confirm $28,500 as a local high and lead to a deeper retrace.

Featured image from Unsplash.
Charts from TradingView.





Source link

Continue Reading

Bitcoin

‘Bullish year ahead’ — Bitcoin primed for Q1 2021 gains, strength index suggests

Published

29 Minuten ago

on

Dezember 29, 2020

By


The monthly relative strength index (RSI) of Bitcoin (BTC) shows the dominant cryptocurrency is primed for another rally.

Is 2021 an ideal time for a Bitcoin rally?

The RSI is a momentum indicator that measures whether an asset is overbought or oversold. When the RSI surpasses 75, it signals the asset is overbought, and when it drops below 30, it means the asset is oversold.

A pseudonymous trader known as “Crypto Capo” noted that the monthly RSI of Bitcoin is set to close above 80. Historically, when this has happened, BTC has saw a strong rally afterward.

Although the monthly RSI of Bitcoin is above 80, which is technically oversold, BTC’s RSI tends to become oversold for prolonged periods during a bull cycle.

The monthly RSI of Bitcoin. Source: Crypto Capo

Hence, traders often refer to an oversold RSI on a high time frame chart, like the monthly candle chart, to forecast an extended rally in the short term to medium term. The trader said:

“Monthly candle is about to close above 80. When this happens, bullish trend continues, with an avg. return of 1010.87%. Each cycle is shorter.”

However, the trader emphasized that one indicator cannot accurately predict the price cycle of Bitcoin. Crypto Capo explained that the combination of a few indicators could serve as guidance for the future. He wrote:

“You cannot base a prediction on an indicator. What we do is combining several methods to have a guideline for the future, to see what is more likely. But in the end, we adapt to what the price does in the present.”

“Bullish year ahead”

Traders have differing perspectives on where Bitcoin is headed in 2021, but most traders remain overwhelmingly bullish.

Cointelegraph Markets analyst Michael van de Poppe said he anticipates Bitcoin to reach $65,000 to $85,000 by next year’s end. He stated:

“I’ve got to revise my view on the potential level of $BTC at the end of 2021. Through this recent surge, I’m expecting it to be between $65,000-85,000 at the end of 2021. Bullish year ahead.”

Meanwhile, the options market is pricing in a 22% chance of Bitcoin achieving $120,000 by next year, which could also serve as a potential guideline on where BTC is heading in 2021.

In the short-term, however, some traders are cautious in entering leveraged positions. A pseudonymous trader known as “TheBoot” said the ideal scenario is to wait for Bitcoin to consolidate at $25,000 or enter after the next price upsurge. The trader explained:

“No rush to enter leveraged trades on $btc right here imo. Best would be to wait and long low 25k or even mid 24k. Alternatively, wait for the next leg up and then a dip from there.”

Cointelegraph previously reported that whales have been buying Bitcoin more aggressively since Christmas, which could buoy the mid-term bull case for BTC entering into 2021.