A new research report from JPMorgan Chase & Co. indicates that the recent downward spiral in cryptocurrency markets may soon abate.
Nikolaos Panigirtzoglou has pointed to the decline in open interest in CME Bitcoin futures contracts as a sign that the sell-off might be nearing its conclusion.
Open interest—defined as the number of unsettled and active futures contracts trading on exchanges—serves as an indicator of a price trend's momentum. A decline in open interest generally suggests that the price trend is losing steam, thus signaling a limited downside for crypto markets in the near term.
Still in bull territory?
Notably, JPMorgan's view is in line with that of anonymous cryptocurrency analyst Dave the Wave. In a recent post on X (formerly Twitter), Dave the Wave highlighted that Bitcoin's weekly Moving Average Convergence Divergence (MACD) is still above the zero-line, suggesting the cryptocurrency is still in bull territory. Unlike the steep rise outside of the Low Ground Cover (LGC) buyzone observed in 2019, the current MACD patterns indicate a lower risk of a drastic correction back to the buyzone. Dave the Wave anticipates that the MACD will bounce off the zero-line and maintain its bullish stance.
Lackluster price action
After spiking to $28,000, Bitcoin's price recently retreated to the $27,000 level, even in light of positive news from Grayscale Investments.
As reported by U.Today, prominent analyst Mike McGlone recently opined that $30,000 may be the new $12,000 for the largest cryptocurrency.
Considering that the Fed is still determined to tame inflation, Bitcoin might keep struggling to stage an impressive rally.