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Grayscale Investments, the world’s largest digital asset manager, may hold the key to Bitcoin’s (BTC) near-term price outlook, according to JPMorgan Chase.
As Bloomberg reports, strategists led by Nikolas Panigirtzoglou believe that Bitcoin could lose its luster in the short term unless it can “burst” above $ 40,000. The flagship cryptocurrency has broken through this key level twice this month, once before reaching new all-time highs near $ 42,000 and the other last week.
Strategists have determined that the Grayscale Bitcoin Trust, which currently has $ 23 billion in assets under management, will play a critical role in whether or not BTC returns to this level.
They wrote:
“The flow to the Grayscale Bitcoin Trust would likely have to maintain its pace of $ 100 million per day over the next few days and weeks for such a breakout to occur.”
If BTC fails to recover $ 40,000, trend-following traders “could propagate last week’s correction,” analysts said. This means that the path of least resistance could be lower.
Since surpassing $ 20,000 in December, the price of Bitcoin has more than doubled in just three weeks. Digital currency has been constrained in recent weeks as traders seek out the next major catalyst.
In the meantime, Grayscale continues to exert considerable influence in the cryptocurrency market. Average weekly entries into Grayscale’s digital asset products reached $ 250.7 million in the fourth quarter, setting a new all-time high. The Bitcoin Trust generated $ 217.1 million in weekly entries on average.
As Cointelegraph reported last week, the price of Bitcoin rose sharply after Grayscale reopened its services to new investors on January 13.
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