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Bitcoin Might Be Entering A Bearish Market, JPMorgan Analysts Suggest

June 10, 2021 3:51 pm
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Bitcoin Might Be Entering A Bearish Market, JPMorgan Analysts Suggest

JPMorgan Chase analysts think Bitcoin (CRYPTO: BTC) might be entering a bear market.

What Happened: According to a Thursday Bloomberg report, a team of analysts at JPMorgan, led by Nikolaos Panigirtzoglou, suggested that Bitcoin is showing bearish signs despite its recent upward price movements.

The analysts explained that Bitcoin’s relatively depressed share of total crypto market value is another concerning trend and said, “We believe that the return to backwardation in recent weeks has been a negative signal pointing to a bear market," they wrote in a note.

The analysis is based on the 21-day rolling average of the 2nd Bitcoin futures spread over the coin's spot prices.

JPMorgan pointed out that the Bitcoin futures curve was in backwardation for most of 2018 before the coin fell by 74% after major growth in 2017.

This is purportedly an “unusual development and a reflection of how weak Bitcoin demand is at the moment from institutional investors.”

The banking giant's experts also point out that Bitcoin now accounts for only about 42% of the whole cryptocurrency market capitalization, down from 70% earlier this year.

This is viewed by many as a sign that retail investors are lifting other coins and the bank's analysts suggested that only after BTC would regain a share of at least 50%, it will be possible to consider whether the bear market is over or not.

In late April, Panigirtzoglou correctly predicted that Bitcoin was in for a major correction if it did not regain $60,000 soon.

The coin fell to the low $30,000 region shortly afterward.

Price Action: According to CoinMarketCap data, Bitcoin's price increased by over 7.2% from its 24-hour low of $35,749 to a high of $38,334 before settling at a price of $36,682 as of press time.

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