Two JPMorgan strategists—John Normand and Federico Manicardi—issued a report recently, noting that Bitcoin (BTC) is more of a risk-on asset than a hedge against erratic markets. The duo remarked in the report that Bitcoin was the “least reliable hedge” in bear markets.
In March 2020, during the Black Thursday crash, coronavirus-induced panic triggered a massive liquidation across financial markets. Bitcoin and the rest of the cryptocurrency market were not left out of this crash, as the entire market lost about 50% of its value at the time.
However, BTC rebounded swiftly from the decline over the ensuing days and went on to end 2020 almost six times its value from the Black Thursday bottom.
To elucidate on their opinion, the strategists argued in the report that Bitcoin had a very low correlation with other hedges over the past five years. While gold—which is regarded as a traditional hedge asset—rose by a meager 70% over the past five years, BTC has spiked by about 7000% over the same period.
In other news, Bitcoin is currently having a very red day, as the benchmark cryptocurrency has fallen by more than 10% over the past 24 hours. The recent dip erased about $900 million in over-leveraged longs, as the total cryptocurrency market capitalization plunged by over $100 billion.
Key BTC Levels to Watch — January 21
Bitcoin traded on a very negative momentum today as the USA inaugurates its 46th president. The cryptocurrency tumbled by over $5,000 to set a daily low at $31,000 but has recovered to $32,000. Meanwhile, it appears that the $31,000 psychological support will hold and prevent BTC from further declines.
As a confirmation of the $31,000 support, our hourly MACD indicator has just seen a change in trend.
Meanwhile, our key resistance levels are at $33,000, $34,100, and $36,000. While our key support levels are at $31000, $30,000 and $29,000.
Total Market Capitalization: $888 billion
Bitcoin Market Capitalization: $577 billion
Bitcoin Dominance: 65%
Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.
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