First Mover: Bitcoin Steady Over $13K as JPMorgan Has Eureka! Moment

Bitcoin was higher, appearing to hold above $13,000 for the first time since January 2018.

But the most drama in crypto markets came after an exploit of the decentralized finance protocol Harvest Finance sent the platform's native FARM token tumbling by 65% in less than an hour.

In traditional markets, European stocks slid as Spain declared a COVID-19 state of emergency and Italians were urged to stay home. U.S. equity futures pointed to a lower open on signs of a resurgence in the coronavirus and dimming hopes for a big stimulus package prior to the election. Gold was little changed.

Market moves

Bitcoin bulls are accustomed to the put-downs. The largest cryptocurrency has been lambasted in recent years as a "fraud" for having " basically no value" and for failing to qualify as "a suitable investment."

Now, as bitcoin mounts what might be its most durable rally in almost three years, the bulls may have to get used to a new sensation: vindication.

Analysts for JPMorgan, the largest U.S. bank, wrote Friday in a report that bitcoin has "considerable" price upside in the long term, as reported by CoinDesk's Zack Voell.

Bitcoin’s increasing use as an alternative to gold is amplified by millennials’ interest in cryptocurrency, according to the report, written by JPMorgan's global quantitative and derivatives strategy team.

“Even a modest crowding out of gold as an alternative currency over the longer term would imply doubling or tripling of the bitcoin price from here,” the analysts wrote.

Such plaudits from the biggest of big U.S. banks represent a remarkable milestone for a digital asset launched in early 2009 with the specific aim of eliminating middlemen in payment systems.

And it's pretty hard to resist dredging up JPMorgan CEO Jamie Dimon's memorable remark in 2017 that bitcoin was a "fraud."

"If you're stupid enough to buy it, you'll pay the price for it one day," Dimon said at the time.

Lately, that price just keeps going up, buoyed by the growing belief among many crypto investors that bitcoin might serve as a hedge against trillions of dollars of centralbank money printing.

Bitcoin has climbed 82% in 2020, and it has doubled in value since Dimon made the disparaging remark in October 2017. Those who bought the cryptocurrency are looking smart compared with shareholders in JPMorgan, whose shares have tumbled 26% in 2020, leaving the stock price roughly where it stood three years ago.

Bitcoin watch

Bitcoin’s technical charts are showing signs of temporary bull fatigue.

The cryptocurrency carved out a spinning top candle on Sunday, which occurs when an asset sees two-way price action during a specific period. It is widely considered a sign of indecision in the marketplace, especially when it appears following a notable rally, which is the case here.

The candle validates signals from another technical indicator, the 14-day relative strength index, where its reading of over 70 suggests the market is overbought. The immediate support is seen at $12,500 (horizontal line on the daily chart).

Dips could be short-lived, as the cryptocurrency’s long-term bull case has been bolstered by the online payments giant PayPal’s recent decision to announce support for bitcoin.

Also, several top public companies have recently disclosed their bitcoin holdings, providing a strong vote of confidence in the cryptocurrency's future.

Besides, the recent rally from $10,000 to $13,300 is backed by increased accumulation by large investors and looks sustainable.

As of Sunday, the whale population – clusters of addresses held by a single network participant holding at least 1,000 BTC – rose to 1,939, the highest since September 2016, according to data source Glassnode.

- Omkar Godbole

Read More: Active Bitcoin Addresses at Highest Since 2017’s $20K Price Record

What's hot

An attack against decentralized finance (DeFi) protocol Harvest Finance has sent the platform’s native token, FARM, tumbling by 65% in less than an hour (CoinDesk)

Swiss central bank, Bank of International Settlements plan test of central bank digital currency by end of year (The Block)

Lawyer files motion to dismiss U.S. government charges that Ethereum developer Virgil Griffith violated sanctions law by speaking at North Korean cryptocurrency conference (CoinDesk)

Proposed Chinese law outlaws all yuan-pegged tokens – except for Its own central-bank digital currency (CoinDesk)

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