Most cryptocurrencies have seen green candles in their price charts this week. Their leader, Bitcoin, has recorded a massive recovery over the past few days. It now trades at $42,421. Earlier this week, the coin dropped below $40,000, causing investors to think that a huge bearish correction was imminent.
So, why the current uptrend? JP Morgan analyst Nikolaos Panigirtzoglou might have the answers. He says the selling pressure from Grayscale is now declining. The asset management company has been cashing out its Bitcoin holding since last week after the US Securities and Exchange Commission approved the conversion of the company’s Bitcoin Trust into an Exchange-Traded Fund.
JP Morgan Analyst Claims Grayscale Prompted Investors to Book Profits
Moreover, Panigirtzoglou argues that Grayscale’s move to dump its BTC may have influenced investor behavior as the majority of the investors rushed to book profits. He also disagrees with some analysts’ opinion that the recent downtrend was due to a shift toward spot Bitcoin ETFs. He says if that were the case, the shift would only have made a small impact since ETF issuers have been buying Bitcoin.
Meanwhile, Panigirtzoglou expects the crypto market to be less volatile following the introduction of Bitcoin ETFs. He argues that the digital asset market will soon be highly liquid due to more funds entering the market, thus reducing the common wild price swings.
Altcoins Follow BTC’s Path
As mentioned earlier, Bitcoin isn’t the only digital currency seeing green candles on its price chart. Several altcoins have mirrored BTC’s performance this week. For instance, Ethereum, which powers the biggest blockchain in terms of decentralized apps, has skyrocketed to $2,276 as of this writing.
Analysts expect the token’s price to rise higher as the Ethereum blockchain prepares to make a massive network upgrade that will enhance transaction speed and lower gas fees.
The Solana ecosystem has also seen some gains this week. BONK, the meme coin that recently posted an impressive rally, is up 4.6% over the past seven days and now trades at $0.0001226. SOL, the native token of the Solana blockchain, has added 5.1% to its value this week. It changes hands for $97.89.
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