JPMorgan has released a research report predicting a bullish rebound for Bitcoin in August. Despite the recent intense market correction, the banking giant sees potential for recovery as the wave of crypto liquidations is expected to subside this month.
Revised Crypto Net Flow Estimates
The bank has revised its year-to-date crypto net flow estimate from $12 billion down to $8 billion. This adjustment reflects recent market trends and data, providing a more accurate picture of current conditions. JPMorgan acknowledged that its earlier estimate of $12 billion was overly optimistic, noting that Bitcoin’s price was significantly higher than its production cost and even the price of gold, making the initial estimate unrealistic.
Current Market Conditions
At the time of the report, Bitcoin was trading at $57,290, a significant drop from its March all-time high of $73,737. Over the past month, Bitcoin has exhibited an equal count of double top and double bottom patterns, indicating that bulls and bears have an equal chance of taking over, but neither has dominated yet.
Technical Indicators
The On-Balance Volume (OBV) Oscillator shows a negative value, indicating stronger selling pressure compared to buying pressure. The Moving Average Convergence Divergence (MACD) line is below the signal line, with both in negative territory, signaling a bearish trend. Additionally, the Relative Strength Index (RSI) is below the neutral level, sitting at 36.69, further pointing to continued bearish momentum.
Price Resistance and Support Levels
To confirm a bullish reversal, Bitcoin needs to break above the immediate resistance level at $60,000 and sustain it. If this resistance is not breached, further declines towards the support level at $53,000 are likely. A bullish crossover in the MACD and an increase in the RSI towards the neutral level would be necessary to confirm a spike in buying volume. If this occurs, Bitcoin could potentially test the upper Fibonacci band around $76,000. JPMorgan’s report offers a cautious yet optimistic outlook, suggesting that despite the current bearish trends, there is potential for Bitcoin to rebound in the near future.
