JPMorgan Predicts Bitcoin Halving Already Priced In, Is A Major Correction Ahead?

As the Bitcoin (BTC) price continues to flirt in the range of $50,000-$52,000, investors are eagerly awaiting a rally before the upcoming Bitcoin halving in April 2024. However, banking giant JPMorgan said that the impact of halving is already priced in.

Retail Investors Excited for Bitcoin Halving

After a brief pause in January, individual investors are re-entering he crypto space amid the recent pump up in popoluar cryptocurrencies like Bitcoin and Ethereum, said analysts at JPMorgan Chase & Co.

The data suggests that the flow of Bitcoin from smaller wallets, often associated with retail traders, has significantly surpassed that from institutional investors. This is even after accounting for inflows into new spot Bitcoin exchange-traded funds (ETFs), noted Mr. Nikolaos Panigirtzoglou and his team.

With Bitcoin poised for its sixth consecutive month of gains, investors are likely anticipating several pivotal developments within the crypto space. The JPMorgan strategists wrote:

“The revival of the retail impulse in February perhaps reflects the anticipation of three main crypto catalysts over the coming months: the Bitcoin halving event, the next major upgrade of the Ethereum network and the prospect of approval of spot Ethereum ETFs by the Securities and Exchange Commission in May. We believe that the first two catalysts are largely priced in, while for the third catalyst, we see only a 50 per cent chance.”

Is A Major BTC Price Correction Due?

The ongoing BTC price rally appears to be tapering off, signaling a potential downturn as Bitcoin heads towards its first week of losses in over a month. Over the last week, the Bitcoin price is trading 1.20% in the negative territory trying to stay above $51,000. Should this trend persist, it would mark Bitcoin’s first negative week since the commencement of its recent rally in late January.

However, as the April halving event, which reduces supply, looms closer, Bitcoin may soon regain its momentum. But some market analysts believe that the upside could be limited from here till the halving event.

Currently, the demand coming Bitcoin ETFs has overwhelmingly outpaced the BTC supply by 13x. With halving, this gap is only to get wider from here. Some market analysts expect the BTC price to peak to $273,000 after the halving event.

Even if the upside looks side, the downside could be 20% from here. Author of stock-to-flow model PlanB says that he doesn’t see the BTC price crashing under $40,000.