Bitcoin News Today: Institutional Sellers Cap Bitcoin’s Climb as JPMorgan Sees $126K Fair Value

Bitcoin fell below $109,000 recently amid renewed downward pressure, as the so-called “conference indicator” — a widely followed on-chain metric — continued to influence market sentiment. The move comes after a volatile week in which traders debated the likelihood of a short-term reversal to the $118,000 level or a further decline to $105,000. Despite retail traders aggressively buying the dips, larger investors have been net sellers, keeping Bitcoin in a short-term downtrend. Data from Hyblock shows that retail traders in spot and futures markets have been net buyers, particularly on platforms like Binance and Coinbase. However, whale and institutional-sized investors have dominated selling pressure, limiting Bitcoin’s ability to break above key resistance levels [2].

JPMorgan analysts have meanwhile argued that Bitcoin’s current price is undervalued compared to gold, particularly given the historically low volatility of the cryptocurrency. The volatility of Bitcoin has fallen from nearly 60% at the start of the year to about 30% today, which the bank attributes to the growing influence of corporate treasuries and passive inflows. These dynamics are similar to central bank quantitative easing after the 2008 financial crisis, which helped reduce market swings by locking assets into passive holdings. JPMorgan estimates Bitcoin’s fair value at around $126,000 by the end of the year on a volatility-adjusted basis [1].

The bank also highlighted that corporate treasury purchases now account for more than 6% of Bitcoin’s total supply, further contributing to market stability. The inclusion of major firms such as Strategy (formerly MicroStrategy) into equity indices has drawn new inflows, while Metaplanet’s recent upgrade to mid-cap status in the FTSE Russell indices has also contributed to Bitcoin’s broader institutional adoption. JPMorgan analysts noted that Bitcoin’s volatility-to-gold ratio has fallen to 2.0, the lowest on record, indicating that Bitcoin is currently consuming twice as much risk capital as gold in portfolio allocations. This suggests that Bitcoin would need to rise by approximately 13% to match the valuation of gold in terms of private investment [1].

Bitcoin’s volatility has created a significant gap between its current market valuation and its theoretical fair value. At the end of 2024, Bitcoin was trading around $36,000 above its JPMorgan-estimated fair value, but it is now about $13,000 below this level. This discrepancy presents potential upside for the cryptocurrency, particularly if volatility remains suppressed and institutional demand continues to rise. JPMorgan analysts believe this environment makes it easier for institutions to allocate capital to Bitcoin, narrowing the gap with gold in terms of risk-adjusted returns [1].

Despite the positive long-term outlook from JPMorgan, near-term price action remains under pressure. Liquidation heatmaps indicate that Bitcoin has absorbed bids in the $111,000 to $110,000 range, but a breakdown to the $104,000 level is unlikely unless larger order selling continues to outweigh retail buying. Traders are now closely watching for signs of consolidation, particularly through anchored cumulative volume delta data. If sell pressure abates and sentiment shifts, a short-term rebound could be in the works, though the market remains cautious [2].

Source:

[1] JPMorgan says current bitcoin price 'too low,' sees upside to $126,000 by year-end (https://www.theblock.co/post/368653/jpmorgan-says-current-bitcoin-price-too-low-sees-upside-to-126000-by-year-end)

[2] Bitcoin trend reversal to $118K or another drop to $105K (https://cointelegraph.com/news/bitcoin-trend-reversal-to-118k-or-another-drop-to-105k-which-comes-first)