- Reuters/Dado Ruvic
- Bitcoin is trading down more than 35% since the beginning of 2018.
- Technical analysts at JPMorgan see a “fairly high risk” of bitcoin dropping to $4,605 a coin.
Bitcoin has had a rough start to 2018, but things may get even worse before they get better.
While the cryptocurrency avoided the historic selling pressure that swept much of the markets last week, it is still down more than 35% year-to-date.
Bitcoin gripped the attention of Wall Street and Main Street as it soared to an all-time high close to $20,000 in mid-December. Investor anxieties about a frothy market, cryptocurrency hacks, and the potential of a regulatory crackdown in some Asian countries have since dragged the entire market for digital coins to half of its peak worth.
Now, conditions may be forming for a sell-off towards $4,605, according to chart-readers at JPMorgan. That would be a nearly 50% decline from its current price of $8,682 a coin.
“The question is whether we go there straight away, indicated on a failure to clear 10128 and 10776, or at a later stage after a stronger countertrend rally,” technical analysts at the bank wrote in a note to clients on Friday.
Bitcoin’s recovery from a low above $5,900 earlier this month was “impressive,” according to the bank. Still, JPMorgan sees a “fairly high risk” of a sell-off towards the $4,605 level if the digital currency doesn’t break through its resistance level between $10,128 and $10,776.
“Above 10776 though, the door for a broader countertrend rally to 14334 if not to 16304 (76.4% on different scales) would be wide open,” the bank concluded.
Bitcoin hasn’t traded in that range since early January, according to CoinMarketCap data.