Bitcoin
Bitcoin and Cryptocurrency Markets Expected to Recover in August, Says JPMorgan
JPMorgan says the cryptocurrency market will see a significant recovery from August onwards, but it has reduced year-to-date net inflows from $12 billion to $8 billion.
Analysts at the bank shared the new crypto forecast in a research note, suggesting that the crypto market should see liquidations begin to ease this month. The Wall Street giant’s bullish projection comes as crypto markets continue to hover in the red following a particularly brutal June.
Bitcoin Pricewhich hit highs of $73,000 in March, has pulled back sharply over the past month amid sell-off pressure.
Catalysts for the decline included miners dumping BTC after network rewards were halved post-halving, and the recent wave of dumping by the German government. The market also reacted strongly to news of imminent refunds from Mt.Gox.
BTC is currently trading around $57,330, down more than 13% in the past month. In recent weeks, Bitcoin has been hovering near support zones, with analysts suggesting that bears could target the $50,000 area.
JPMorgan revises net flow estimates downward
In their research note to investors, JPMorgan analysts said that the sell-offs are likely to dissipate significantly by the end of July. After that, Bitcoin and the broader crypto market could start to rally.
However, JPMorgan revised its net inflow estimates to $8 billion, expressing skepticism about its previous projection of $12 billion. In addition to BTC being priced high relative to its production cost and relative to gold, the bank’s analysts also highlight the decrease in foreign exchange reserves and broader liquidation pressure as the main reasons.
The decline in Bitcoin reserves can be attributed to liquidations, mainly by Gemini or Mt. Gox creditors. In addition, the German government’s massive dump of 50,000 BTC seized from a piracy website has seen most of it sold in recent weeks.
On-chain data show The German government wallet currently holds around 4,925 BTC, worth approximately $283 million. When German police seized Movie2k’s BTC, it was worth around $2 billion and has since risen to $3.6 billion.