Bitcoin may have to tumble below $30,000 before major buyers are lured back in, JPMorgan’s crypto expert says

Panigirtzoglou’s view differs from some strategists, who think a drop below $30,000 would likely spell further trouble for bitcoin. Edward Moya, senior market analyst at currency firm Oanda, said on Tuesday that “a break of $30,000 could see a tremendous amount of momentum selling.”

Bitcoin traded at around $37,500 on Friday. That was more than 40% off April’s record high of close to $65,000, but it was around 25% higher than at the start of the year.

Despite bitcoin’s rally in recent days, Panigirtzoglou said he saw little sign that institutions were moving back in. “If I look at these bitcoin fund flows, there is no evidence here of a buying-the-dip mentality,” he said.

He pointed to the futures market, where prices for bitcoin futures have been trading lower than the spot price. Panigirtzoglou said this suggested demand from major institutions – who often use bitcoin futures to gain exposure – was weak.

Bitcoin soared in the first few months of 2021, and was at one point up more than 120% for the year, spurred on by companies such as Tesla adopting the cryptocurrency.

Yet the price began to crater in May after Tesla boss Elon Musk said the electric car company would no longer accept bitcoin as payment due to its “insane” energy use. A fresh crackdown by Chinese authorities also soured the mood.

However, Panigirtzoglou said there were signs as early as March and April that institutional interest was waning, particularly in a sharp slowdown of flows into bitcoin products such as Canada’s exchange-traded funds.

Panigirtzoglou, who edits JPMorgan’s weekly flows and liquidity note, which regularly looks at bitcoin, said the lesson from 2018’s price crash was that the current phase of lower prices could last months.

He said one important metric of whether institutional demand was picking up again would be rising futures prices relative to the spot price. Another positive signal would be if the share of bitcoin in the cryptocurrency market began to grow again, after shrinking in recent months.

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