Bitcoin’s 10% climb in the last two days raises a basic question: Is this a dead cat bounce or the foundation for a rally?
Two unrelated actions raised Bitcoin’s profile: El Salvador became the first nation to adopt Bitcoin as legal tender, and ForUsAll, a provider of retirement funds, announced plans to allow workers to invest up to 5% of their 401(k) contributions in Bitcoin or other cryptos.
But there may be trouble ahead for world’s leading cryptocurrency.
Analysts at JPMorgan Chase note that Bitcoin’s spot price is above the futures price, and that’s a reason for caution.
“We believe that the return to backwardation [in Bitcoin] in recent weeks has been a negative signal pointing to a bear market,” JPMorgan strategist Nikolaos Panigirtzoglou said in a research note. Pictured is JPMorgan Chase CEO Jamie Dimon testifying virtually to the Senate Banking Committee on Wednesday, May 26, 2021.
“We believe that the return to backwardation in recent weeks has been a negative signal pointing...read more...