Strategists at JPMorgan warn that the price of Bitcoin continues to fall and a bear market is imminent.
JPMorgan analysts, led by Nikolas Panigirtzoglou, recently issued a warning about the upcoming Bitcoin market for investors.
According to JPMorgan, the Bitcoin market shows a clear bearish sign when the Bitcoin futures curve is in a backward position, meaning the spot price is higher than the futures contract price.
“We believe that the downward momentum in recent weeks is a negative signal, a sign of a bear market. This is an unusual development and reflects how weak institutional demand for Bitcoin is at the moment when this is the world that tends to use CME futures contracts to gain exposure to Bitcoin.” experts said.
Besides, Bitcoin’s market share dropping from about 70% in January to nearly 42% now is another issue that the team expressed concern. Analysts point to this drop as “a bearish signal that appeared in December 2017”.
JPMorgan sees the market drawing parallels between the current situation and Bitcoin’s 2018 crash, a time when investors fled as the price of BTC plummeted following its peak on May 17. 12/2017.
For most of 2018, the price of Bitcoin futures contracts was lower than the spot price. It was around the time that the BTC price dropped from the $15,000 region to $4,000.
However, some in the community disagreed with JPMorgan’s analysis above.
For example, Twitter account DTC Crypto Trading writes: “A analyst at JPMorgan says a drop in BTC while prices are rising is a sign of a bear market?… Quite a few times BTC price goes up again after the move? produce a continuous deterioration over a period of time”.
Meanwhile, rival banks are seeing huge demand from institutional investors. Even the CEO of JPMorgan, Jamie Dimon, recently admitted that institutional clients want exposure to Bitcoin.
Goldman Sachs has repeatedly said it sees great institutional demand for BTC, noting the cryptocurrency is slowly becoming a new asset class.
Morgan Stanley also offers a number of Bitcoin investments to wealthy clients as their demand for crypto assets grows.
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