- JPMorgan analyst believes that ICE debut in the cryptocurrency market triggered the sell-off.
- BTC/USD slips below the critical support of $8,000.
Bakkt launch might have caused the sell-off in the cryptocurrency markets, according to JPMorgan Chase & Co analysts.
Bitcoin lost 20% of its value earlier this week. The price of the biggest cryptocurrency plunged from $10,000 to the area below $8,000 in the biggest one-week drop since November 2017. Nikolaos Panigirtzoglou from JPMorgan believes that the debut of ICE platform for physically delivered bitcoin futures led to massive liquidation of short positions on CME and spot market.
The event that was meant to become another step towards the maturity of the market actually depressed the prices.
“It may be that the listing of physically settled futures contracts (that enables some holders of physical Bitcoin e.g. miners to hedge exposures) has contributed to recent price declines, rather than the low initial volumes,” JPMorgan expert commented.
This is not the only viable theory behind the recent sell-off in the cryptocurrency markets. Many experts and analysts offer various explanations for the recent market developments,
Read our take on the matter in the weekly review.
Meanwhile, at the time of writing, BTC/USD is changing hands at $7,980, losing nearly 2% on a day-on-day basis. A sustainable, move below $8,000 handle will increase the downside pressure on the price and open up the way towards the next support at $7,728 (September 26 low). Considering that the Relative Strength Index on the intraday charts points downwards, there is a high probability of the bearish scenario layout at this stage.
BTC/USD, daily chart