Cryptocurrency market analysts at JP Morgan point to the differences between bitcoin (B T c) spot prices and BTC futures prices as a potential bearish signal for the market.
In a note to clients on Thursday, JPMorgan analysts led by global market strategist Nikolaos Panigirtzoglu wrote that the bitcoin market has returned to a laggard — a situation when spot prices are above futures prices. Analysts said last month’s correction in crypto markets saw bitcoin futures slip into backwardness for the first time since 2018.
According to strategists, the Bitcoin futures backwardation should be seen as a negative sign for the BTC price, even though Major rally on the market In the last two days, with bitcoin price $37,500 on Thursday. Analysts stressed that the bitcoin futures curve was backward for much of 2018, a year when bitcoin was down 74%. $20,000. reaching its then historical high level of At the end of 2017:
“We believe that the reversal of the laggards in recent weeks has been a negative sign that points to a bear market. […] In our opinion, the backward movement in bitcoin futures is a bearish signal echoed in 2018.”
In the latest analysis, JP Morgan specifically looked at the 21-day moving average of the second bitcoin futures spread over spot prices. Analysts trading futures contracts on the Chicago Mercantile Exchange saw “unusual developments and a reflection of how weak the demand for bitcoin is at the moment from institutional investors”.
Analysts also noted that the weak share of bitcoin in the total crypto market cap is another related trend. As previously reported by Cointelegraph, Bitcoin dominance over crypto markets fell by 40% At the end of May, the share is the lowest in the past three years after increasing by more than 70% this January.
At the time of writing, bitcoin bitcoin share It accounts for 43% of the total crypto market capitalization, according to data from CoinMarketCap, accounting for $682 billion out of the total crypto market capitalization of $1.6 trillion. Some analysts, such as crypto index provider Stack Fund, believe that BTC dominance may reclaim its previous highs In a very short span of time.