JP Morgan continues to advise caution on the crypto market in the near term due to several factors, including the lack of positive indicators and declining interest from retail investors.
“With the lack of positive catalysts, retail impulse dissipating and the three headwinds previously mentioned in our publication (rising positioning, high Bitcoin price versus gold and estimated Bitcoin production costs, subdued virtual “We remain cautious on the crypto market in the short term, as currency VC funding (VC funding) remains present,” JPMorgan analysts led by Nikolaos Panigirtzoglou wrote. said in a report Thursday.
The past two weeks have seen “significant” selling and profit-taking in crypto markets, with retail investors likely playing a bigger role than institutional investors, analysts said.
“In fact, retail investors appear to have sold both crypto and equity assets during April,” the analysts said.
They added that not only did spot Bitcoin ETFs see outflows in April, but indicators of retail interest in stocks, such as net inflows to equity funds, also declined over the past month.
“Net inflows into equity funds turned negative in April after strong buying in February and March,” analysts said.
Institutional investor
As for institutional investors, momentum traders such as commodity trading advisors and quantitative funds have historically taken profits from “extremely long” positions in both Bitcoin and gold, analysts said. However, the analysts concluded that institutional investors other than CTA/quant funds are reducing their positions to a lesser extent.
Analysts at JPMorgan warned last month that Bitcoin prices could fall after the halving, as the event was already priced in. Analysts predicted in February that the price of Bitcoin would fall to $42,000 after the halving, citing lower miner rewards and higher production costs.
According to The Block's price page, Bitcoin's current price is around $58,900.
Disclaimer: The Block is an independent media outlet that delivers news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block remains independently operated to provide objective, impactful, and timely information about the cryptocurrency industry. Current financial disclosure information is as follows:
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
