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JPMorgan: “Limited Downside” For Crypto in the Short-Term
JPMorgan analysts have indicated that the recent corrective phase in the cryptocurrency markets, accompanied by liquidations, might have concluded.
“Limited Downside”
JPMorgan analysts have indicated that the recent corrective phase in the cryptocurrency markets, accompanied by liquidations, might have concluded.
According to the banking giant’s study of CME Bitcoin Futures contracts, the unwinding of long bets may have reached its conclusion, which leads them to predict that the near-term crypto markets would only see minimal downside.
Traders had established long positions based on favorable developments, including the XRP ruling, expectations for SEC approving spot Bitcoin ETFs, PayPal entering the stablecoin market and preparations for the upcoming Bitcoin halving event.
However, a recent wave of long position liquidations was sparked by declining optimism. The SEC expressed confidence in appealing the XRP judgment, while Congress debated strict stablecoin laws, which caused the SEC to postpone decisions on whether to approve Bitcoin ETFs.
The analysts at JPMorgan feel that the unwinding of long positions is almost complete, pointing out that the correction is part of a larger unwinding of risk assets including equities and technology companies. Frothy positioning in the technology sector, rising U.S. real yields, and worries about Chinese economic growth were all factors that contributed to the fall.
At the time of writing, the price of Bitcoin (BTC), the largest cryptocurrency, hovers around $26,000.
