First mover: Bitcoin stable above $ 13,000 as JPMorgan has Eureka! moment

Bitcoin was higher and appeared to hold above $ 13,000 for the first time since January 2018.

However, the most dramatic drama in the crypto markets occurred after exploitation of the decentralized financial protocol. Harvest Finance dropped the platform’s native FARM token 65% in less than an hour.

In traditional markets, European stocks fell as Spain declared a COVID-19 state of emergency and told Italians to stay home. U.S. stock futures indicated lower opening on signs of a coronavirus resurgence and clouded hopes for a major stimulus package ahead of the elections. Little has changed in gold.

Market moves

Bitcoin bulls are used to the defeats. The largest cryptocurrency has been classified as a “scam” in recent years because it has “essentially no value” and was not classified as a “suitable investment”.

Now that Bitcoin is arguably its longest-running rally in nearly three years, the cops may have to get used to a new sensation: justification.

Analysts from JPMorgan, the largest US bank, wrote in a report on Friday that Bitcoin has a “significant” price increase in the long term, as reported by CoinDesk’s Zack Voell.

The growing use of Bitcoin as an alternative to gold is fueled by millennials’ interest in cryptocurrency, according to the report by JPMorgan’s global quantitative and derivatives strategy team.

“Even a modest displacement of gold as an alternative currency in the longer term would mean that the Bitcoin price would double or triple from here,” the analysts write.

Such hymns of praise from the largest major US banks mark a notable milestone for a digital asset launched in early 2009 with the specific goal of eliminating middlemen in payment systems.

And it’s pretty hard to resist dredging the memorable 2017 remark made by Jamie Dimon, CEO of JPMorgan, that Bitcoin was a “scam”.

“If you’re foolish enough to buy it, one day you’ll pay the price,” Dimon said at the time.

This price has been rising lately, driven by the growing belief among many crypto investors that Bitcoin could serve as a hedge against trillions of dollars in central bank money printing.

Bitcoin is up 82% in 2020 and has doubled in value since Dimon made the derogatory comment in October 2017. Those who bought the cryptocurrency are looking wise for price roughly where it was three years ago when compared to JPMorgan shareholders, whose shares fell 26% in 2020 and left the stock.

Bitcoin price versus JPMorgan since early 2019.

Source: TradingView

Bitcoin clock

Bitcoin daily price chart.

Source: TradingView

Bitcoin’s technical charts are showing signs of temporary bull fatigue.

The cryptocurrency carved out a spinning candle on Sunday that occurs when an asset experiences reciprocal price movement during a period of time. It is widely viewed as a sign of indecision in the market, especially when it occurs after a notable rally, which is the case here.

The candle validates signals from another technical indicator, the 14-day relative strength index, where a reading above 70 indicates the market is overbought. The immediate support is at USD 12,500 (horizontal line on the daily chart).

Slumps might be short-lived as the long-term bull fall in the cryptocurrency was bolstered by the recent decision by online payment giant PayPal to announce support for Bitcoin.

Additionally, several leading public companies recently announced their Bitcoin holdings, which represents a strong vote of confidence in the future of cryptocurrency.

In addition, the recent rally from $ 10,000 to $ 13,300 is supported by the increasing accumulation of large investors and looks sustainable.

As of Sunday, the whale population – address cluster of a single network participant with at least 1,000 BTC – rose to 1,939 according to the Glassnode data source, the highest level since September 2016.

Read more: Active Bitcoin addresses highest since record price of $ 20,000 in 2017

What is hot?

An attack on the DeFi protocol (decentralized finance) Harvest Finance resulted in the platform’s native token, FARM, falling 65% in less than an hour (CoinDesk).

Swiss Central Bank, Bank of International Settlements plans to test the central bank’s digital currency by the end of the year (The Block)

The attorney files a motion to dismiss the US government’s indictment that Ethereum developer Virgil Griffith violated the sanctions law at the North Korean cryptocurrency conference (CoinDesk).

The proposed Chinese law prohibits all tokens linked to yuan – with the exception of the central bank’s own digital currency (CoinDesk).


The latest on economics and traditional finance

Central banks are raising € 17 billion (US $ 20 billion) of common bonds issued by the European Commission to fund Coronavirus Relief Programs (WSJ).

Morgan Stanley’s chief US equities strategist says to buy the dip if the S&P 500 falls after the election, as the economic stimulus is almost certain whether it wins (Bloomberg).

The March sell-off caused by coronavirus was linked to record bid-ask spreads on US Treasuries that showed liquidity limits in the world’s deepest bond market (Reuters).

Mission Creep ?: European Central Bank President Christine Lagarde is pushing the organization beyond traditional monetary concerns like global warming and gender imbalance (Reuters).

According to Ripple’s Brad Garlinghouse, tech companies have an obligation to help solve societal problems and reject the “apolitical” stance of Coinbase’s Brian Armstrong (CNBC).

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