The recent downturn in the cryptocurrency markets, coupled with widespread liquidations, may be nearing its conclusion, according to analysts at JPMorgan.
According to an analysis that JPMorgan performed on the CME Bitcoin Futures contracts, it appears that the process of liquidating long positions may have reached a point of completion.They believe, based on this evaluation, that a decline in the cryptocurrency markets in the near future has only limited potential.
Traders had previously established these long positions due to positive developments in the industry, such as the XRP legal ruling, the potential approval of spot Bitcoin ETFs by the SEC, PayPal’s entry into the stablecoin market, and preparations for the upcoming Bitcoin halving event. These developments have all contributed to an optimistic outlook on the future price of Bitcoin.
On the other hand, a recent spike in the number of liquidated long positions has resulted from diminished optimism. The Securities and Exchange Commission (SEC) has delayed its decisions regarding the potential approval of Bitcoin exchange-traded funds (ETFs) as a result of the SEC’s assurance that it will challenge the verdict regarding XRP and the ongoing discussions in Congress regarding stringent regulations for stablecoins.
The analysts at JPMorgan believe that the process of closing long positions is getting closer and closer to being finished. They point out that this correction is part of a larger trend of unwinding risk assets, which includes equities as well as technology companies. A number of factors contributed to the fall, including elevated positioning in the technology sector, rising real yields in the United States, and concerns regarding the expansion of China’s economy.
At this very moment, the value of Bitcoin (BTC), the most well-known cryptocurrency, is hovering somewhere around $26,000. This was the case just a few moments ago.