market strategist Archives

22nd September 2021

As Ethereum Price Suffers, JPMorgan Strategist Hits The Asset With A 55% Lower Valuation

The past two days following the weekend close have not been the best for Ethereum. Along with the broader crypto market, the digital asset has suffered numerous dips that saw it break below $3,000 for the first time in a month. Although recovered back above $3,000, Ethereum continues to have a hard time maintain its position above this resistance point.

Although hopes are up in the community for recovery, a JPMorgan strategist has warned that the market is likely to see more dips that will drive the price of the digital asset further down. The strategist’s forecast essentially puts Ethereum in a bear market. Placing the bottom of the downtrend at less than half the current value of the digital asset.

Related Reading | Mid-Cap Altcoins Hold Onto Highs Better Than Bitcoin And Ethereum

Ethereum Is Overvalued

JPMorgan global market strategist Nikolaos Panigirtzoglou said that ETH’s fair value is actually much lower than its current trading range. The strategist put the asset’s fair value at $1,500, less than half of its current price. Unlike the rest of the market, Panigirtzoglou does not believe that the Ethereal network is the most attractive for investors, even though the price might suggest otherwise.

ETH price struggles at $2,900 | Source: ETHUSD on TradingView.com

The growth of ETH recently has been attributed to the growth of market applications like decentralized finance. Currently, Ethereum is the leading smart contracts platform, which has seen the highest development of decentralized finance protocols. But even this does not convince the strategist of ETH’s current valuation.

According to Panigirtzoglou, the actual valuation of the digital asset should be 55% less than it currently is. Panigirtzoglou points out that with growing competition from other blockchains like Solana and Cardano, Ethereum’s offering is no longer unique and “can easily be replicated by other networks.”

The Rise Of The “ETH Killers”

Panigirtzoglou elaborated on the growing competition for Ethereum, highlighting that there are just going to be more blockchains popping up to compete with the network in the future. The strategist brought up Cardano’s latest upgrade, which added it to the growing list of competitors for Ethereum. “You’re already seeing competition from Binance, competition from Solana,” Panigirtzoglou said. “And there are going to be more in the future,” he added.

Related Reading | Ethereum Is Ready For Inevitable Climb Over $10,000, Says Crypto Analyst

The rise of the so-called “ETH Killers” has certainly been an interesting turning point for the crypto industry. Although Ethereum still hosts the majority of smart contract-related activities in the market, blockchains like Solana have started creeping up to take more share from the leading blockchain. Giving credence to Panigirtzoglou’s belief that these blockchains will make ETH less valuable in the long run.

Featured image from Libertex, chart from TradingView.com

2nd August 2021

Bitcoin Is More Oversold Than It Was At ATH In April, Says Analyst

Bitcoin has continued to show tremendous gains lately in the market. The weekend saw the price of the digital asset shooting up above $42,000 for the first time in over a month, seeing continuous green daily closes for nine days straight for the first time in ten years.

Following this has been a number of speculations on why this is happening. And more importantly, how this trend is most likely to end. The indicators continue to point towards bullish but with the price fluctuations that bitcoin is notorious for, there is no telling how exactly the current uptrend will end.

Related Reading | 8 Green Candles: Here’s What Happened The Last Time In Bitcoin

Talking on this was Matt Maley, a chief market strategist at Miller Tabak & Co., who was on MarketWatch’s call of the day. Maley explained his reasoning behind what he believes was needed for the current gains in the market to stick as prices rally.

Don’t Get Too Excited

Maley started out with some advice for investors, who he tells to gauge the action of the prices during the normal market hours. Alluding to the fact that the recent bitcoin price rallies have been happening during off-market hours, which are weekends, nights, and early mornings. He attributes this advice to the markets being much thinner, with lower volumes, during off-market hours. Thus, it is imperative that the movement of the digital asset be observed during normal trading hours to see how the price moves.

Related Reading | Fast Money’s Brian Kelly Remains Bullish On Bitcoin, Here’s Why

Maley warned to not get too excited about the recent price increases. Waiting to see what the market does continues to be Maley’s advice to clients with regards to the weekend price rallies that have been experienced in the market.

“The markets are much ‘thinner’…and the volumes are much lower…on the weekends,” Maley said. “So we’ll want to see [if] bitcoin can remain above $40k once we get into next week before we get too excited.”

BTC price dips following weekend rally | Source: BTCUSD on TradingView.com

Maley continues to want to wait to see how the price holds up this week before anything else. His target is now the 200-daily moving average (DMA), and that stands at $44,600. Opining that the DMA had gotten close to that level since the rise and falls since May, twice. But had rolled over both times before hitting it. “Therefore, it could/should provide some resistance upon any further rally in early August,” said Maley.

Bitcoin Is Oversold

Maley pointed out that the digital asset now looks overbought on the current short-term basis. This is based on the Relative Strength Index of the asset, an oscillating indicator used to track the magnitude of recent losses in relation to recent gains.

Related Reading | Bitcoin To Reach New All-Time Highs, Market Strategist

Talking about bitcoin being oversold, Maley said, “Don’t get us wrong, it got much more overbought before it rolled over in January and February … and in November of last year.” Continuing on, Maley added, “However, it is more overbought than it was at the all-time high in April, so investors and traders alike will have a lot more confidence if this weekend’s move holds into the middle of next week.”

The price of bitcoin has continued to show strong bullish indicators following the recent dip in the price. But if Maley is correct in his analysis and bitcoin is overbought, then the market might continue to see further dips in the price of the digital asset.

Related Reading | Why Another Wave Up For Altcoins Is Probable According To BTC Dominance

This could push the price of bitcoin down past $35,000 as the price finds a comfortable correction point following the rally. As of the time of this writing, bitcoin is currently trending up slowly following the dip in the early hours of Monday, trading at $39,443 according to TradingView.com.

Featured image from CoinDesk, chart from TradingView.com

28th July 2021

Bitcoin To Reach New All-Time Highs, Market Strategist

Market strategist Michael Lee says that he sees bitcoin reaching new all-time highs. Lee was on Fox Business Monday in an interview to talk about his outlook on bitcoin. Lee is the founder of investment firm Michael Lee Strategy which offers wealth planning and investment management to clients. Michael Lee Strategy offers its services as an investment adviser representative through Compass Financial.

The founder sees a good future ahead for bitcoin which he explains as a momentum asset class. Michael Lee who is an investor himself does not believe bitcoin will be slowing down soon, calling even new all-time highs for the digital asset as more time passes. According to Lee, he believes that the digital asset will definitely bring in as much profit or even more than any of the other digital currencies currently in the market.

The Best Days Are Ahead For Cryptocurrencies

Market strategist Lee said in the interview that the best days remain ahead for cryptocurrencies, and in particular, bitcoin. The strategist explained that bitcoin is a first mover in the market. Predicting the asset will do just as well as other digital assets or even better than others.

Bitcoin market cap chart from TradingView.com

BTC market cap now sits at $718 billion | Source: Market Cap BTC on TradingView.com

Speaking about fed regulation for bitcoin and cryptocurrencies, Lee said, “I think it’s a long time before we see any sort of taper or any sort of restrictive policy from the Fed.” Lee continued on to say, “it’s not only like that with the Fed. It’s also like that with central banks worldwide.”

Lee’s resolve in the future of the coin looks unshaken, looking positively ahead for the price performance of the coin going forward.

Bitcoin High Price A Result Of Endless Money Printing

Michael Lee also took time in the interview to address the current speculations in the market that connect the recent bitcoin price surge to the rumors of Amazon adding digital currencies on its platform. Talking on this, Lee said that the theory of the price surge being related to the price increase was wrong.

Lee attributed the growth of the digital asset to $60,000 back in April was due to governments printing money and not limiting the amount of fiat being printed.

The founder pointed out that it was hard to explain how the price movements work. But related this to trading activities being carried out in the crypto market.

I think it’s hard to explain some of these moves, but it’s a very much a momentum asset class. So, as soon as you get a little bit of momentum to the upside, the follow on trades just keep coming and coming and coming. And then all of a sudden you go from $29,000 to almost $40,000 in the span of a little over a week.

Featured image from Forbes, chart from TradingView.com