Investment bank JPMorgan Chase has warned of a further downside in the bitcoin price, anticipating an impending bear market. Analysts at the bank looked at the trend of bitcoin futures and noted “an unusual development and how weak the demand for bitcoin from institutional investors is at this point in time.” However, many disagree with this analysis.
JPMorgan warns of impending bear market
Analysts at JPMorgan Chase led by Nikolaos Panigirtzoglu warned investors of an impending bitcoin bear market in a note to investors last week.
Analysts focus on bitcoin futures, which are trading at a discount to the spot price, a process known as backwardation. “We believe that the return of backwardness in recent weeks has been a negative sign pointing to a bear market,” he wrote, adding:
This is an unusual development and shows how weak the demand for bitcoin is at the moment from institutional investors who use regulated CME futures contracts to gain exposure to bitcoin.
Analysts at JP Morgan confirmed that their outlook for bitcoin was negative. He pointed to another sign that worries him – a sharp decrease in bitcoin’s market share in the overall crypto market, which fell from 60% to nearly 40% between April and May. Analysts attribute this decline to B T c Market share “a bearish signal carrying some echoes of the retail-investor-driven foam of December 2017.”
They see a parallel between the current situation and the bitcoin crash in 2018, when investors boomed in cryptocurrencies in 2017 and exited largely as prices plummeted during 2018. The bitcoin futures curve was also in a downward trend for most of 2018 when the price B T c According to a detailed description by JP Morgan, it fell from around $15K to $4K.
Some took to Twitter to disagree with JPMorgan’s analysis. For example, the Twitter account DTC Crypto Trading wrote: “So the ‘analyst’ at JP Morgan says that on backwardness B T c While the price is rising, there is a signal of a bear market. No clue who ‘analyzes’ it, but they want to hire better people. enough every time B T c There has been a continuous period of lag, the price has risen.” Many agreed with this analysis.
Meanwhile, rival investment banks are seeing huge demand from institutional investors. Even recently JPMorgan CEO Jamie Dimon accepted That institutional clients want to be exposed to bitcoin. Goldman Sachs has repeatedly said that it is looking vast institutional demand for B T c, given that cryptocurrency has become a new asset class. Morgan Stanley Is Already Offering Something bitcoin investment For wealthy clients due to the high demand for crypto assets.
The price of bitcoin rose after Sunday afternoon the explanation Tesla CEO Elon Musk said that his company will resume accepting the cryptocurrency “when reasonable (~50%) clean energy use by miners is confirmed with a positive future trend, allowing Tesla bitcoin transactions again.” Will start over.” At the time of writing, bitcoin price sits at $38,874 based on data. Bitcoin.com Market.
What do you think about JP Morgan’s prediction of bitcoin? Let us know in the comments section below.
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