JPMorgan says bitcoin is poised for a further slide after its 40% plunge since April - and sees echoes of the 2018 crash
JPMorgan sees worrying signs in the bitcoin futures market.
The bank's strategists, led by Nikolaos Panigirtzoglou, said the fact that bitcoin futures have been trading at a discount to the spot price - technically known as backwardation - is a sign of weak demand from big players.
"We believe that the return to backwardation in recent weeks has been a negative signal pointing to a bear market," the strategists said in a note on Wednesday.
"This is an unusual development and a reflection of how weak bitcoin demand is at the moment from institutional investors that tend to use regulated CME futures contracts to gain exposure to bitcoin." Futures are contracts that oblige the buyer to purchase an asset at a set price at a fixed date in the future.
Bitcoin has rebounded over the last two days and was up around 4% to $37,915 on Thursday. But it was nonetheless still 40% lower than April's record high of close to $65,000.
JPMorgan's strategists said their outlook for bitcoin was negative. They said another worrying signal was that bitcoin's share of the total crypto market fell sharply during April and May from around 60% towards 40%.
Read Full Article: JPMorgan says bitcoin is poised for a further slide after its 40% plunge since April - and sees echoes of the 2018 crash
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