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JPMorgan Bitcoin analysts have warned that the recent movement of the BTC price is indicative of an upcoming bear market. According to them, the recent drop in the price of Bitcoin could be a sign of a long-term bearish trend.
As a reminder, the Bitcoin price went down by more than 50% since reaching its all-time high. Last week, we saw it getting close to the $30,000 mark, from where it rebounded a few days ago. The slight price increase came after the news about El Salvador adopting bitcoin as its official currency, together with the US dollar.
“We believe that the return to backwardation in recent weeks has been a negative signal pointing to a bear market,”
JPMorgan strategist Nikolaos Panigirtzoglou warned the public.
At the moment of writing, the price of one BTC is about $37,300, but the JPMorgan Bitcoin report suggests that it could go down once again.
The analysts from JPMorgan suggest that the future of the Bitcoin price can be predicted by looking at its past.
They believe that what’s happening in 2021 is very similar to what happened with Bitcoin three years ago when the so-called “crypto winter” put cryptocurrencies in a bearish mode for several months.
The analysts explain that the surge cryptos experienced in the first few months of 2021 came as a result of retail investors’ FOMO – fear of missing out.
Not only did they get on the Bitcoin bandwagon, but a huge number of investors put their money in altcoins. Altcoin investing amplified following Elon Musk’s endorsement of Dogecoin.
As a result, Bitcoin’s dominance in the crypto universe diminished. Right now, Bitcoin makes up about 40% of the market, which is a major dip, considering that at the start of the year, it was somewhere at 70%. Bitcoin going under 50% is something that hadn’t been the case since 2018.
JPMorgan Bitcoin analysts suggest that in order for it to get back in a bullish mood, Bitcoin needs to get back to over 50%.
Not everyone shares JPMorgan’s Bitcoin prediction. Bullish traders believe the current price is “nearing a bottom.”
They believe the price will not plummet much deeper than it is at the moment. What they’re basing their prediction on is the recent surge in outflows from cryptocurrency exchanges.
The story goes that some major crypto exchanges registered a big outflow of Bitcoin over the last couple of days. As reported by CoinDesk, exchanges registered a drain of 22,550 BTC on Monday, marking the biggest net outflow since 2020.
How they interpret the situation is that crypto traders seem to be okay with the current Bitcoin price. They seem not to have any intention of selling their Bitcoin assets at this point. Instead, their decision is to move their cryptos to private wallets in the hope that the price will go up once again in the future.
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