Why JP Morgan is bullish on altcoin market

JP Morgan, in a recent research report, anticipated a recovery in August for Bitcoin and the cryptocurrency market. The report also stated there was a good chance that liquidations may decrease before the end of this month.

However, the world’s most valuable bank reduced its projected net inflows for this year due to the negative market conditions. The revised estimate, based on earlier estimates of $12 billion, indicates that the cryptocurrency market may see inflows of $8 billion.

The Tier 1 bank projected that if Bitcoin’s price increases next month, the altcoins may also see a recovery. There is a false belief that altcoins are negatively impacted by the rise of BTC, creating a Bitcoin season. This won’t be the case, even as altcoins adopt Bitcoin’s strategy. Actually, in the later part of 2023, when altcoins last rose to mark the start of an altcoin season, they were taking their cues from Bitcoin.

The Wall Street bank stated that the drop in reserves is probably due to the German government selling digital assets it seized from illegal activity, or to bitcoin liquidations by Gemini’s creditors or the now-defunct cryptocurrency exchange Mt. Gox. The market has been concerned about the German government’s continued sale of Bitcoin. Bitcoin had significant sales during the past few weeks because of its seizure of more than $2 billion, and the asset’s price has reflected the heightened pressure.

More than two-thirds of altcoins are now performing worse than BTC over the previous 90 days, altcoins are not even close to experiencing an altcoin season.
Only Toncoin (TON), PEPE, BONK, Kaspa (KAS), Monero (XMR), and Tron (TRX) are among the cryptocurrencies performing better than Bitcoin which is in the green. Every other token is reporting a loss.

Historical data affirm the crypto market is deemed to be in a downtrend when it regularly trades below the 200-day average, and bullish when they trade above the average. In October, the average value of BTC exceeded the 200-day SMA, at $28,000. Expectations for a spot bitcoin ETF in the US drove the breakout, which opened the door for a surge that saw prices reach historic highs above $70,000 by March.

The US interest rate is one element that influences Bitcoin’s price. The allure of riskier investments, like cryptocurrency, grows as interest rates decline. According to the Federal Reserve meeting minutes, which were made public on Wednesday, officials led by Chairman Jerome Powell are hesitant to lower interest rates unless additional information becomes available that would increase their confidence that inflation is gradually approaching their 2% target. When the Labor Department issues its non-farm payroll data for June, that may happen as soon as tomorrow.