- JPMorgan’s cautious 2024 outlook for cryptocurrencies has sparked interest, with Ethereum possibly outperforming Bitcoin due to network upgrades.
- Bitcoin’s upcoming halving event, usually bullish, is seen as already priced in by JP Morgan, potentially increasing mining costs and reducing the hash rate.
JP Morgan, a renowned global financial services leader, has recently released its financial outlook for 2024, delivering a cautious perspective on the cryptocurrency industry. This outlook, marked by a straightforward and unbiased tone, has created ripples of interest in the cryptocurrency market.
Ethereum’s Potential to Shine in 2024
JP Morgan’s analysis points to Ethereum (ETH) potentially outshining Bitcoin (BTC) in the upcoming year. Ethereum’s impending EIP-4844 update, dubbed “Proto-dank sharding,” is a potential catalyst for its performance. The market expects this upgrade to strengthen Ethereum’s network efficiency and scalability, positioning it favorably.
In contrast, JP Morgan perceives Bitcoin’s much-anticipated halving event, typically considered a bullish indicator, as already influencing its current price. The event, which reduces mining rewards for new Bitcoins, is anticipated to increase production costs and potentially cause a 20% decline in the hash rate.
JP Morgan suggests this could impose higher operating expenses on miners and potentially drive less efficient miners out of the market.
JP Morgan Favors Ethereum in Its Outlook
The report prominently features concerns about what it perceives as “excessive optimism” surrounding Bitcoin. According to the bank’s analysts, this optimism has resulted in Bitcoin being overbought in a market that has preemptively priced in the effects of the upcoming halving event. They also cast doubt on the expectations for capital inflows into Spot Bitcoin ETF products, potentially setting the stage for market disappointment.
Concerning mining, experts anticipate that the impending halving event will double production costs based on current hash rates and Bitcoin mining difficulties. This cost escalation and the predicted hash rate drop may force miners with high operating costs to exit the Bitcoin ecosystem, further influencing its dynamics.
While JP Morgan’s outlook seems to favor Ethereum over Bitcoin for the coming year, the bank has not refrained from voicing concerns about Ethereum, specifically regarding its centralized staking mechanism. This aspect has raised questions about network security and decentralization, which are crucial factors in any cryptocurrency’s broader acceptance and success.
Ethereum Price Projections for 2024
Crypto analyst and trader Michaël van de Poppe has conducted an in-depth analysis of Ethereum’s price chart, forecasting a potential price rally between $3,400 and $3,800 in the first quarter of 2024.
#Ethereum making a positive support and resistance flip at the $2,125 mark.
Even if it corrects to $1,900, the trend remains up and the next area for resistance is found at $3,400-3,800 in Q1 2024. pic.twitter.com/F5fThIqONl
— Michaël van de Poppe (@CryptoMichNL) December 14, 2023
Van de Poppe observes that Ethereum’s price has already demonstrated a positive support and resistance shift around the $2,125 mark. Even if Ethereum’s price corrects to $1,900, we expect it to follow an upward trajectory toward the $3,400 mark.
Ethereum’s price action between June 2022 and November 2023 has formed an ascending triangle pattern, a bullish technical formation characterized by higher lows and equal highs. This setup predicts a potential 43% upswing to the $2,943 level. Ethereum’s recent breakout led to a 16% rally to a local peak at $2,403, followed by a 6.3% dip, with the current price at $2,252.
The future movement will oscillate between the ascending triangle’s base at $2,030 and the weekly resistance level at $2,539. A decisive break above $2,539 could pave the way for Ethereum’s price to reach its theoretical target of $2,943 or the psychologically significant level of $3,000.
