The Bitcoin (BTC) sale by Strategy, the largest institutional bull, after a long period of inactivity, negatively impacted the price. Bitcoin, which was above $70,000 on the day the sale news broke, fell below $60,000 due to the subsequent selling pressure.
Although Bitcoin regained the $63,000 level at the start of the new week, concerns remain in the market that the sell-off may continue.
US banking giant JPMorgan, in its latest report, stated that Strategy’s BTC sale has created concern in the market and recommended increasing reserves.
According to The Block, JPMorgan said that Strategy’s (MSTR) recent Bitcoin sale has tightened the market and increased concerns.
At this point, JPMorgan analysts noted that the company may need to increase its US dollar reserves to restore investor confidence and allay concerns about a potential sell-off.
Analysts noted that while Strategy described the sale of 32 BTC as a move to show flexibility to preferred shareholders, it also raised concerns in the market.
JPMorgan stated that Strategy’s dollar reserves currently only cover approximately six months’ worth of dividend payments and recommended that the company increase its dollar reserves.
In this context, JPMorgan analysts state that they have adopted a cautious approach to cryptocurrency.
Despite this cautious view, analysts say the current weak sentiment in crypto markets could be a bullish reversal signal going forward.
According to analysts, a positive second half of the season continues to depend on the following:
- Big bull Michael Saylor’s strategy is to increase dollar reserves, restore investor confidence, and alleviate concerns about future Bitcoin sell-offs.
- Strategy needs to clarify how it will meet its $1.7 billion annual dividend obligations.
- The passage of the Clarity Act into law (analysts say the probability of it being passed this year is less than 50%).
As negative signals, the bank cites the fact that this year’s crypto market inflows are approximately $22 billion (half of last year’s total) and that BTC’s mining cost remains below $87,000. However, the bank also added that it concluded that the current weak market sentiment could also be a counter-signal for an upward turnaround.
*This is not investment advice.
