Since Bitcoin and cryptocurrencies began to fall at the end of 2021, many have been waiting for the “bottom”, the moment when the selling pressure ceases and the currencies reach their lowest value before recovering. After long months of losses and a few weeks of gains, J.P. Morgan Chase, one of the world’s largest banks, believes we have hit rock bottom. According to a banking report, published by Business Insider, the analyst Kenneth Worthington believes that the crypto market has reached its lowest value and from now on we will have a change in trend. For the analyst, this reversal is the result of the industry starting to get excited about the Ethereum The Merge Update, an important step towards Ethereum 2.0, which will make the blockchain proof of stake and eliminate the need for mining. Ethereum has been one of the biggest gainers in recent weeks, even outperforming Bitcoin in percentage gains. For many, including JP Morgan, the interest in the future of Ethereum with its big changes is the catalyst for this moment.
Ethereum movement in the last month. Source: CoinMarketCap Also, part of the overall crypto market recovery comes from the end of the period when the effects of the LUNA collapse still have an impact. With the market pulling back towards $1 trillion in its cap, the analyst speculates that the collapse of Luna and the collapse of UST are not factors that increase selling pressure as intensely.
“It appears that the crypto markets have bottomed out, even though trading volumes are still somewhat weak. What helped the rally, we believe, was a more limited ‘contagion’ from the collapse of Terra/Luna”, analyst.
What is happening with Bitcoin?
The bank reinforces that the main driver of these recent gains in the crypto market is not Bitcoin, but the positivity towards Etheruem.
“We think the real catalyst has been the Ethereum upgrade and the positive data following the launch of the Sapolia testnet in early July and the Ropsten testnet in June, indicating that Merge will be viable in 2022.”
The bank also noted that the ability of Bitcoin and Ethereum to gain 36% and 102%, respectively, since the June lows is another indicator that the market has bottomed. Usually, Bitcoin is down more than 60% from its all-time high of nearly $70,000 in November 2021but as usual, the cryptocurrency is still above many other securities in past periods who bought during record 2017. Still not at a loss even with almost 10 months of declines.
