May was the worst for Bitcoin’s price in the past ten years. According to a JPMorgan analyst, the largest cryptocurrency, Bitcoin, is likely to continue Falling in a short time.
Nikolaos Panigirtzoglou, the JPMorgan analyst, wrote in the latest research note to the client. He wrote that weakened institutional demand might contribute to the drag of Bitcoin price below $30,000.
Moreover, he forecasted that Bitcoin would continue to trade between $24,000 and $36,000 in the mid-term. The forecast is based on Bitcoin’s volatility ratios to Gold.
Here the fair value of Bitcoin is based on a volatility ratio of Bitcoin to Gold. Moreover, the ratio is around x4, which would be one-fourth of $145 k or $36k. However, currently, the fair value for Bitcoin based on the volatility ratio of Bitcoin to Gold is around x6.
Fair Value Range
This would be around one-sixth of $145k or $24k. Thus, we can see a fair value range of $24k to $36k over the medium-term, according to the note. He further added that JPMorgan still considers a $145,000 prize mark a long-term theoretical target for the BTC price.
JP Morgan is assuming a convergence of Bitcoin volatility to that of Gold. In addition, they are assuming an equalization of Bitcoin allocations to that of Gold in investor portfolios. However, he further added that the longer-term signal remains problematic as it has yet to turn short.
It is needless to say that full convergence or equalization of volatility or allocations is not likely to happen in the foreseeable future.