Last week, the price of bitcoin fell to the level of $43,300. Ethereum fell to the support of $3,000, and XRP - to the mark of 95 cents. The total capitalization of the cryptocurrency market was $1.9 trillion.
The price of bitcoin recovered sharply on Sunday, although it recorded an overall weekly drop. On Friday, when it became known about the new repressions of the Chinese leadership against cryptocurrencies, bitcoin fell by 10%, but then played back half of the fall. After yesterday's announcement of the Huobi exchange about the upcoming shutdown of all Chinese users, the cryptocurrency updated local lows around $40,750. From this level, in less than two hours, it managed to rise by 7% and again be above $43,000.
The outgoing week turned out to be volatile for bitcoin and the entire digital asset market. On Monday, even before the announcement of the position of the People's Bank of China, the main cryptocurrency fell by almost 8% along with stock indices. The movement is associated with fears of the debt crisis of the Chinese developer Evergrande. According to the Bybt service, the volume of liquidations on the cryptocurrency market has exceeded $300 million in the last 12 hours alone.
A new report by JP Morgan bank concludes that institutional investors demonstrate a confident preference in favor of Ethereum over bitcoin. This conclusion was made by analysts based on a comparison of the futures prices of the corresponding cryptocurrencies with their spot markets. In relation to bitcoin, they write that due to the correction this month, the futures price again fell below the spot price, whereas in August it rose above it. According to JP Morgan, this ratio is an obstacle for bitcoin and a reflection of weak demand from institutional investors who tend to use regulated futures contracts of the Chicago Mercantile Exchange to access bitcoin.
As analysts explain, in normal conditions, when the demand for bitcoin futures is not so low, contracts are traded above the market. Such an overpayment occurs due to the relatively low risk of gaining access to bitcoin using futures. It is usually quite high and exceeds 5% in annual terms. Nevertheless, during periods of reduced demand, futures begin to trade at a discount relative to the spot market. This was the case, for example, from May to July, and it is happening now. Ethereum futures, in turn, retain the premium, which increased to 7% in September. The divergence of the dynamics of demand for derivatives of the two cryptocurrencies has been observed since August. The price of bitcoin has fallen by 10% over the past month, while the price of Ethereum has only fallen by 5%. The authors of the report conclude that this indicates a much healthier demand for Ethereum compared to bitcoin from institutional investors. This is not the first time that analysts of a large bank have expressed such a point of view. In May, Goldman Sachs released a report on the topic of cryptocurrencies, in which it described bitcoin as a low-functioning and wasting electricity tool and at the same time praised Ethereum, calling it the future of cryptocurrencies.
The forecast for the coming week expects a further decline in the price of bitcoin to the levels of 43000, 42500, 42000, 41000 and 40,000 dollars. Ethereum will reach the supports of 2970, 2950, 2900, 2850 and 2800 dollars, and XRP will fall to the levels of 92, 90, 88, 85 and 80 cents.