(Bloomberg) -- Bitcoin hovered near $36,000 on Monday, below a level that strategists at JPMorgan Chase & Co. see as an inflection point for the digital coin.The cryptocurrency could be hurt by an exodus of trend-following investors unless it can “break out” above $40,000 soon, a team including Nikolaos Panigirtzoglou said. The pattern of demand for Bitcoin futures and the $22.9 billion Grayscale Bitcoin Trust will help determine the outlook, they added.“The flow into the Grayscale Bitcoin Trust would likely need to sustain its $100 million per day pace over the coming days and weeks for such a breakout to occur,” the strategists wrote in a note on Friday.Traders seeking clues about investor appetite for risk have been gripped by Bitcoin’s stunning rally and turbulent 10% slide from a record of almost $42,000 on Jan. 8. The cryptocurrency boom since March has reflected the ebullience of financial markets awash in stimulus -- as well as concern over whether gains will ultimately prove fleeting.The JPMorgan strategists said Bitcoin was in a similar position in late November, except with $20,000 as the test. Flows of institutional investment into the Grayscale trust helped the world’s largest cryptocurrency extend its rally, they wrote.Trend-following traders “could propagate the past week’s correction” and “momentum signals will naturally decay from here up till the end of March” if Bitcoin’s price fails to break above $40,000, they said.Bitcoin fell 1.4% to $36,014 as of 3:25 p.m. in London on Monday.Exactly what’s driven the yearlong near-quadrupling in Bitcoin’s price remains murky. Commentators have cited day traders, wealthy buyers, hedge funds, companies and even signs of interest from long-term investors like insurers.‘Dread to Think’Some, like Chris Iggo, remain skeptical of Bitcoin’s appeal to large institutions.“I dread to think what most risk officers would think about that being in a core investment portfolio,” the chief investment officer of core investments at Axa Investment Managers wrote in a note. “For assets to be considered in a long-term investment portfolio one should be able to attach some fundamental intrinsic value to them.”Bitcoin’s proponents argue it’s maturing as a hedge for dollar weakness and the possibility of faster inflation in a recovering global economy. Others say its defining characteristic remains speculative booms followed by busts.Read more: Does Bitcoin Boom Mean ‘Better Gold’ or Bigger Bubble? QuickTakeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.