Key Takeaways:
- JPMorgan’s managing director warned investors against fueling the “frothy” market.
- Solana rallies on despite the warnings and locks a new all-time high.
YEREVAN (CoinChapter.com) – Despite the recent setback on the crypto market, the layer-one platform Solana, one of Ethereum’s main rivals rocketed to a new all-time high of $216, before sliding back to $200 ahead of the New York session opening bell Thursday. But financial giant JP Morgan warned traders against giving in to the “retail investors’ mania”.
JPMorgan against altcoins?
Nikolaos Panigirtzoglou, the managing director at JP Morgan voiced his concerns over the rising wave of altcoin attention and called it a “froth” and a mania, which could lead to a sell-off. He specifically singled out Solana, Binance’s BNB, and Cardano as prime Ethereum competitors and engines behind the growth of the DeFi sector.
In a letter to investors, the director pointed out, that Bitcoin’s share in the market looks “uncomfortably low”. Mr. Panigirtzoglou indicated the NFT trading boom and smart contract functionality as the key reasons behind the growing demand for DeFi platforms like Solana.
“The previous phase of retail investors’ mania into cryptocurrency markets was between the beginning of January and mid-May… and retail investors are making cryptocurrency markets look frothy again.”
warned the director.
Also read: FTX announces Solana-enabled marketplace; SOL soars towards $200
Despite the harsh warnings about “frothy” DeFi markets, Solana’s native token SOL kept the bullish momentum and rocketed on, while Bitcoin and Ethereum took a back seat.
SOL daily chart
Solana conquered the psychological resistance level at $200 and peaked at $216 in the Thursday session. After the spike, the rally subsided, while maintaining the overall bullish bias. The price action progressed in confident bursts, followed by short sideways movements. On the chart below, those periods are marked with short resistance lines.
The relative strength index (RSI: purple graph at the bottom) stood at 86. Any reading higher than 70 indicates that the traders might consider the asset as “overbought” and withdraw, subsequently driving the price down.
However, the RSI has been charting through the overbought territory for almost a month now. It is not alarming the traders yet, and the value of Solana continues to rocket.
Is the violently bullish price action the “retail mania” JPMorgan warned about? It is not yet clear. They have already been right once, foreseeing the mid-May crash. However, making rock-solid predictions on the crypto market doesn’t always pay off.
Also read: SEC refuses to explain ‘Howey Test,’ the law it used to f*** Ripple Labs
