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JP Morgan Predicts Limited Downside for BTC, Crypto Community Reacts

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Sat, 26/08/2023 - 10:23
JP Morgan Predicts Limited Downside for BTC, Crypto Community Reacts
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In its latest research report, global investment bank JP Morgan has predicted that the recent sell-off in crypto markets might be nearing an end.

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JP Morgan noted that it sees "limited downside" for the crypto market in the near term as the unwinding of long positions appears to be coming to an end, which is good news for Bitcoin and the crypto market as a whole.

The primary reason for this deduction was given by JP Morgan as a drop in open interest in CME Bitcoin futures contracts.

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A decrease in open interest, which is the amount of active and unsettled futures contracts trading on exchanges, often signifies that a price trend is waning. As a result, JP Morgan predicts a "limited downside for crypto markets over the near term."

However, analysts foresee a "new round of legal uncertainty" for crypto markets given that the SEC is seeking an appeal in the Ripple case. Similar consideration is given to the status of approvals for spot Bitcoin ETFs.

Crypto community reacts

The crypto community reacted positively to the report, with the majority viewing it as bullish. The prediction came as a soothing relief following the recent sell-off in the market, which saw BTC trip down to lows of $25,234 on Aug. 17.

Bitcoin has slightly recovered but has yet to hit $27,000. At the time of writing, the price of Bitcoin was hovering around $26,000.

BTC was trading at roughly $26,011, up 0.2% daily after dropping nearly 12% in the last two weeks.

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On Friday, risk assets fell slightly as Federal Reserve Chairman Jerome Powell said that the U.S. central bank was willing to hike interest rates further if necessary.

Amid this, positive Bitcoin indications are emerging. Ali, a crypto analyst, provides clues on Bitcoin network activity, namely the USD worth of coins transferred on-chain, which is a compelling indicator for forecasting macro uptrends.

Significant spikes in this metric have frequently preceded BTC bull runs in the past. Given that this indicator has been consolidating for the past four months, Ali believes that a surge in the total value of on-chain transfers might hint at Bitcoin's next macro uptrend.

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