Banking Giant JPMorgan Says Bitcoin price could drop to $13,000

The FTX drama has spillover the entire crypto market with another 10% crash over the last 24 hours. In less than a week, the broader crypto market has lost 20% of its value i.e. equal to $200 billion.

The latest report from JPMorgan shows that the crypto market is facing a “cascade of margin calls”, failing to meet it could cause major liquidations in the market.  As per JPMorgan strategists led by Nikolaos Panigirtzoglou, the Bitcoin price could collapse all the way to $13,000.

The BTC price is already down by 20% on the weekly chart. As of press time, Bitcoin is trading 11.75% down at a price of $16,143 and a market cap of $309 billion. In a report published on Wednesday, the JPMorgan team wrote:

“What makes this new phase of crypto deleveraging induced by the apparent collapse of Alameda Research and FTX more problematic is that the number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking” in the crypto sphere.

JPMorgan on FTX-Led Bloodbath in Crypto

The FTX episode has spread like a contagion in the market. Also, there’s a lot of drama with FTX chief Sam Bankman-Fried struggling to find news investors in the market. A day after announcing their support to acquiring FTX’s non-U.S. assets, Binance has backed out of the deal on Wednesday.

Now market analysts have a strong fear that any potential bankruptcy of FTX could lead to a contagion in other crypto outfits. As a result, investors are still coming to terms with the FTX episode.

JPMorgan’s Bitcoin price prediction of further fall comes on the basis of Bitcoin’s production cost to miners. As we know, with the Bitcoin price drop on one hand and rising energy costs on the other, miners have been forced to liquidate their BTC holdings to cover their operational costs.

“At the moment, this production cost stands at $15,000, but it is likely to revisit the $13,000 low seen over the summer months,” said JPMorgan.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.