JPMorgan says bitcoin is poised for a further slide after its 40% plunge since April - and sees echoes of the 2018 crash
JPMorgansaid the fact that bitcoin futureshave been trading below the spot price is a worrying signal.
- The bank's analysts said it reflected how weak demand for
bitcoinwas among institutional investors.
- Bitcoin has rallied over the last two days, but was still around 40% off its April record high on Thursday.
JPMorgan sees worrying signs in the bitcoin futures market.The bank's strategists, led by Nikolaos Panigirtzoglou, said the fact that bitcoin futures have been trading at a discount to the spot price - technically known as backwardation - is a sign of weak demand from big players.
Bitcoin has rebounded over the last two days and was up around 4% to $37,915 on Thursday. But it was nonetheless still 40% lower than April's record high of close to $65,000.JPMorgan's strategists said their outlook for bitcoin was negative. They said another worrying signal was that bitcoin's share of the total crypto market fell sharply during April and May from around 60% towards 40%.
Bitcoin's lower market share is "a bearish signal carrying some echoes of the retail-investor-driven froth of December 2017," they said. Amateur investors moved heavily into alternative coins as the crypto world boomed in 2017, but quickly withdrew from the market as it dropped sharply over 2018.JPMorgan said the bitcoin futures curve was also in backwardation for most of 2018, when the
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