JPMorgan predicted a "limited downturn" in the cryptocurrency market
JPMorgan analysts predicted a "limited decline" in the cryptocurrency market
The closing of long positions is nearing completion rather than being in its early stages, analysts said
Cryptocurrency markets experienced a correction and liquidation in August 2023, but the difficult stage has passed and there will be a "limited downturn" in the market in the near term, The Block reported, citing a report from analysts at JPMorgan Bank.
Having analyzed bitcoin futures positions on the CME exchange, which serve as an indirect indicator of market movement, the analysts concluded that the closing of long positions is nearing completion rather than being in its early stages.
"As a result, we see limited downside potential for cryptocurrency markets in the near term," JPMorgan analysts said.
The correction in the crypto market occurred due to the fact that positive news went into the background, writes the publication. So, the U.S. Securities and Exchange Commission (SEC) postponed the decision on the approval of spot bitcoin-ETF, in particular on the application of the Kathy Wood fund ARK 21Shares. The SEC has also announced plans to appeal part of the XRP court ruling in the case against Ripple, and Congress is debating tough rules on stablecoins.
In August, Fundstrat predicted bitcoin would rise to $150k after the launch of the bitcoin-ETF. On August 25, bitcoin traded at $26k, according to Coingecko.
On August 16, traders lost $134 million overnight due to cryptocurrency rate hikes. About 92% of traders whose orders were forcibly closed expected further market growth, and about 7% of liquidated positions were short.
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