JP Morgan Bearish on Bitcoin & Ethereum
JPMorgan analysts issued warnings as institutional investors lose interest in Bitcoin and Ethereum.
The Chicago Mercantile Exchange (CME) futures contracts for Ethereum and Bitcoin are getting close to a situation known as “backwardation,” in which futures prices drop below spot prices.
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This change implies that institutional demand for these assets is declining. Strong demand has traditionally been linked to “contango,” a market state in which futures prices are higher than spot prices, indicating optimism and expectations of price growth.
The shift to backwardation reflects the more volatile and uncertain market conditions in mid-2024.
The investment analyst hinted at the following variables,
Absence of Positive Catalysts: Some institutional investors have decided to secure profits and limit their exposure because of the crypto space’s lack of noteworthy positive developments or news.
Price volatility may increase if institutional participation declines because a larger portion of the market is retail investors, with different risk tolerances, and investment horizons.
Market Attitude: Institutional investors frequently have an impact on market attitude. They may become less involved, which could erode confidence and cause more sell-offs or hesitancy to enter the market.
The market has an opportunity to correct itself and address the factors causing institutional hesitancy, even though the current decline in future demand may present short-term difficulties.
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