The market seems confused, as predictions for bitcoin price after halving have started to wildly fluctuate. Bitcoin (BTC), the leading digital asset, has encountered a pullback of over 10% from its all-time high, signaling a potential shift in market sentiment. Notably, Bloomberg reported on Friday that the demand for spot Bitcoin Exchange-Traded Funds (ETFs) has shown signs of moderation, adding to concerns about the BTC’s short-term outlook.
Analysts at JPMorgan Chase and Co. have cautioned that this retreat may have further room to run, casting a shadow over bitcoin’s recent bullish trajectory. The group of 10 spot Bitcoin ETFs has recently witnessed its largest four-day outflow since their introduction on January 11. This trend suggests a waning appetite for Bitcoin investment products.
Bitcoin Price After Halving
Despite earlier optimism, bitcoin is on track for one of its worst weeks this year, with a 4% retreat. At the time of writing, BTC was trading at around $64,000, a significant decline from its recent peak above $72,000.
JPMorgan strategists have reiterated their belief that bitcoin still appears overbought, renewing a prediction made in February regarding further declines leading up to the highly-anticipated halving event in April. This event, which will reduce the supply of newly minted BTC from miners, could exert additional downward pressure on bitcoin’s price.
On the other hand, Coinbase, a leading digital asset trading platform, recently said in a report titled “Bitcoin Halving Handbook: A Primer for Institutional Investors” that the upcoming halving is set to have profound effects on the market indicating massive upward potential for the digital asset.
JPMorgan Sees Bearish Signals
The sustained open interest in CME Bitcoin futures, coupled with declining ETF flows, are seen as significant bearish signals for bitcoin’s price by JPMorgan strategists led by Nikolaos Panigirtzoglou. They noted that the pace of net inflows into spot Bitcoin ETFs has slowed markedly, challenging the notion of sustained one-way net inflow.
As the the halving event approaches, profit-taking may intensify, particularly given the overbought positioning backdrop despite the recent correction.
Last month, JPMorgan predicted that the BTC price would gradually decline towards $42,000 after April, anticipating a subsiding of the euphoria surrounding the Bitcoin halving.
Bernstein Raises Bitcoin Forecast to $90K
Despite the recent decline in bitcoin prices, investment firm Bernstein has raised its year-end forecast for the digital asset to $90,000, up from the previous projection of $80,000. The firm remains optimistic about Bitcoin mining stocks, citing bitcoin’s recent rise and positive responses to new spot BTC ETFs.
Last week, when the price of bitcoin was above $70,000, Bernstein predicted that bitcoin will shoot above $150,000 in the near future.
Analysts Gautam Chhugani and Mahika Sapra stated:
“We built Bitcoin institutional flows in our estimates to arrive at Bitcoin price. We estimated $10Bn inflows for 2024 and another $60Bn for 2025. In the last 40 trading days since ETF launch on Jan 10, Bitcoin ETF inflows have crossed $9.5Bn already.”
Chhugani and Sapra from Bernstein highlighted several factors contributing to their positive outlook, including the start of a new BTC bull cycle, strong inflows into ETFs, aggressive expansion of miner capacity, and record-high revenues for miners.
Additionally, the analysts also pointed out the potential for significant gains in mining stocks leading up to the anticipated Bitcoin halving event in April.
