Since former President Donal Trump an assassination attempt on Saturday, the Bitcoin price has surged by about 9%, now sitting at around $64,000.
While momentum is growing, the price movement is sparking debate. Some skeptics believe it might be overvalued.
Before the incident, Bitcoin price traded lower in recent weeks due to massive liquidations by Gemini creditors, Mt. Gox creditors, and the German government.
The German government has been offloading bitcoins that were previously seized in criminal activities.
As J.P. Morgan analysts noted in a recent publication, these liquidations are expected to subside after July.
"We continue to look for a rebound in the CME bitcoin futures position proxy into August to catch up with the recent rise in gold futures position proxy," the report stated.
That said, J.P. Morgan analysts caution that any recovery in the crypto market is likely to be tactical rather than the start of a sustained bullish trend.
“This is because the bitcoin price is too high at present, not only against its production cost (at $43k currently) but also its vol-adjusted comparison to gold, which currently stands at $53k,” analysts wrote in a note.
The bank's analysis highlighted a key metric that tracks the difference between the bitcoin price and the implied price that matches the market value of total private sector holdings of gold on a vol-adjusted basis.
"This metric points to mean reversion around the zero line, thus constraining any upside potential for bitcoin prices over the longer term," J.P. Morgan explains.
The probability of a Trump win increased further following last weekend’s events, with betting odds rising to around 70%, up from 60% before last weekend and 50% before the June 27th presidential election debate.
Bitcoin price is benefiting from the higher chances of a Trump win as his second presidency is seen by some investors as more favorable from the regulatory viewpoint.