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Coinbase Demoted to Underweight by JPMorgan Chase

JPMorgan Chase lowered its rating on Coinbase from Neutral to Underweight, citing disappointing BTC-spot ETF-related data that has left cryptocurrency investors dissatisfied.

Wed, 24 Jan 2024, 09:10 am UTC

This week, JPMorgan Chase made a significant move by downgrading Coinbase (COIN) from Neutral to Underweight, maintaining an unchanged target price of $80.

The decision is attributed to concerns related to the BTC-spot ETF market, which is perceived as a potential headwind impacting Coinbase's performance.

Market Volatility and Coinbase's Response

The recent pullback in the broader cryptocurrency market has intensified the risk of reduced trading volumes and associated fees for Coinbase.

On Tuesday, Coinbase experienced a 3.14% decline, reversing the 2.77% gain observed on Monday and concluding the session at $124.19. The market had witnessed a surge in enthusiasm driven by expectations of BTC-spot ETF approvals, propelling Coinbase to a peak of $187.39 in December 2023 before undergoing a correction.

JPM CEO's Stance and Market Dynamics

Of notable significance is the timing of the downgrade, coinciding with the recent Banking Committee hearing on Capitol Hill.

According to FX Empire, JPMorgan Chase CEO Jamie Dimon's vocal skepticism about cryptocurrencies during the hearing, including the statement, "If I were the government, I would close it down," likely influenced market sentiments.

Cryptocurrency Analysis

Bitcoin (BTC) remained positioned below the 50-day Exponential Moving Average (EMA) while maintaining a foothold above the 200-day EMA. This configuration indicates bearish signals in the near term but remains bullish for the longer term. A potential breakout above the $40,277 level could pave the way for a move to the 50-day EMA, with further resistance at $42,968.

Ethereum (ETH), on the other hand, is situated below the 50-day EMA while holding above the 200-day EMA, signaling bearish tendencies in the short term and bullish prospects for the longer term. An upward break beyond $2,255 may lead to a challenge of the $2,300 resistance level and the 50-day EMA, with potential further resistance at $2,457.

As investors navigate the cryptocurrency landscape, the influence of ETF-related developments and scrutiny from U.S. lawmakers remains a focal point, contributing to the dynamic nature of the market.

According to Barrons, support and resistance levels should also be considered, as they provide crucial insights into potential market trends for Bitcoin and Ethereum.

Photo: Sajad Nori/Unsplash

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