Bitcoin has crashed by 40% from $64k to the $40k price range recently. This has many worried that the Bitcoin bear market might have started. Even though most banks have been silent on this new position, JP Morgan says that the futures market is signaling a bear market for Bitcoin. Analysts from the bank have said that Bitcoin is having very weak demand from institutional investors. At the same time, the futures market is very bearish. Even though some might agree or disagree with the analysis, we have to wait and see what the future holds for hodlers.
JP Morgan analysis of Bitcoin bear market
The analyst says that the Bitcoin futures are trading at a discounted rate when compared to spot market. This is a bearish scenario as most institutional investors use CME futures to get into Bitcoin. The recent crash has instilled fear in investors and it could be a signal for a repetitive cycle of downtrend that comes every 4 years. JP Morgan has clearly stated they are no longer bullish on Bitcoin and believe a bear market is here.
Another problematic thing that is happening with Bitcoin is the sharp decline of 20% in its market share and dominance. This is a somewhat similar signal to what happened back in 2017. During that time too the market share of Bitcoin fell drastically which was followed by a crash. At that time the price of Bitcoin became 1/4th of what it was trading at.
Disagreement with JP Morgan’s theory
There was an obvious debate on Twitter after this report from JP Morgan. One Twitter follower said that JP Morgan needs to hire better people. He doesn’t think that the upward price movement is sign of a bear market. The twitter user also said that there has been many instances when BTC has seen a period of backwardation and then the price moved back up.
Other than JP Morgan pretty much every other bank have been solid on their take on Bitcoin. All of them think that the currency has become an asset class and is going to be the future. They have also noted that huge institutional investments are happening in BTC. In fact, when you talk about positivity we should also note that Musk said Tesla will start accepting BTC again when more than 50% miners move to renewable energy resources. After this tweet the price increased to $39k.
What are your thoughts on the analysis made by JP Morgan? And do you think that the Bitcoin bulls will lose control from here on? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.
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