Bitcoin’s recent rebound has not yet restored the confidence that people shattered in the May crash.
The cryptocurrency jumped about 14% in two days, and as of 11:05 on Thursday morning, its trading price was $38,295. Although this momentum may cheer the bulls, a team at JPMorgan Chase & Co. said that a part of the futures market has regressed, and that the current spot price is higher than the futures price is a reason to be cautious.
JPMorgan Chase’s strategist headed by Nikolaos Panigirtzoglou wrote in an announcement: “We believe that the return in recent weeks is a negative sign that points to a bear market. They added that Bitcoin is relatively depressed in the total market value of cryptocurrencies. Share is another worrying trend.
JPMorgan Chase’s analysis is based on the 21-day rolling average of the price difference between the second period of Bitcoin futures and the spot price, and pointed out that the curve of Bitcoin futures has diverged for most of 2018. That year, the cryptocurrency fell 74% after 2018. According to the report, this is an “unusual process, reflecting the relatively weak demand for Bitcoin from institutional investors.” They tend to use futures contracts listed on the Chicago Mercantile Exchange for trading.
According to data from the cryptographic data platform CoinGecko, Bitcoin currently accounts for about 42% of the entire cryptocurrency market value, which is lower than about 70% at the beginning of the year. For some analysts, this shows to a certain extent that the popularity of retail investors has spread to other currencies.
JPMorgan Chase’s strategists stated in a June 9 report that Bitcoin’s share may need to reach more than 50% to make people believe that the current bear market is over. Panigirtzoglou previously pointed out in early May that before the price of Bitcoin fell, Bitcoin’s market share was also declining.
Investors are currently waiting for the next opportunity, waiting for Bitcoin to end the shock trend in the range of 30,000 to 40,000 US dollars. Bitcoin has been in a downward state since it set a record of nearly 65,000 US dollars in April. During the period, Musk’s public criticism of Bitcoin’s energy demand and the suppression of Chinese regulatory authorities were one of the huge resistances. After El Salvador designated Bitcoin as legal tender, the price of Bitcoin received a slight boost on Wednesday.
Chris Weston, director of research at Pepperstone Financial Pty, wrote in a note on Thursday: “We need to see the strong upward trend of Bitcoin in order to convince the bulls that we have come out of this haze.”
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.