Bitcoin entered the week on the front foot, after slipping to its lowest levels since early March during the Asian trading session. The world’s largest cryptocurrency by market cap reached a record high of $64,870 on April 14th, having received a boost from the Coinbase IPO the same day.
Analysts at JPMorgan Chase struck a note of caution in a research note to clients last Tuesday. Nikolaos Panigirtzoglou suggested that if Bitcoin can’t recover above $60,000 soon, its uptrend will likely lose momentum. The note stated: “Over the past few days Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November,” adding that “momentum signals will naturally decay from here for several months, given their still elevated level.” Earlier this year, Panigirtzoglou had stated that Bitcoin has the potential to rally as high as $146,000, amid rising institutional investment.
Meanwhile, the collapse of two cryptocurrency exchanges in Turkey cast a shaddow on Bitcoin last week. The CEO and founder of the Thodex cryptocurrency exchange platform has fled the country with $2bn in client funds, according to reports. In addition, Vebitcoin announced that it has halted all of its activities, citing financial strains. Four people have reportedly been detained as part of an investigation into the cryptocurrency exchange platform.
Another factor attributed to the recent crypto selloff has been concerns over U.S. President Joe Biden’s plan to raise capital gains taxes. Biden’s proposals would alter wealthy Americans’ investment strategies, likely impacting the cryptocurrency market.
On Saturday, Elon Musk crypically tweeted a reaction to the April volatility, referencing the backronym hodl (hold on for dear life).
What does the future hodl?— Elon Musk (@elonmusk) April 24, 2021
Tesla’s first-quarter earnings report are due to be released after the market close on Monday evening. The market will be attuned to any cryptocurrency related statement from the eccentric billionaire. In February, Tesla announced in an SEC filing that it bought $1.5 billion worth of Bitcoin.