Markets
Bitcoin and Cryptocurrency Markets Set to Rebound in August, JPMorgan Says
JPMorgan says the cryptocurrency market will see a decent rebound from August, but cut year-to-date net flows from $12 billion to $8 billion.
The bank’s analysts shared the new cryptocurrency forecast in a research note, suggesting that the crypto market is likely to see liquidations begin to ease this month. The Wall Street giant’s bullish projection comes as cryptocurrency markets continue to float in the red after a particularly brutal June.
Bitcoin Pricewhich hit highs of $73,000 in March, fell sharply last month due to selling pressure.
Catalysts for the decline include miners dumping BTC after network rewards were halved after halving, and the recent wave of dumping by the German government. The market also reacted strongly to the news of Mt. Gox’s imminent repayment.
BTC is currently trading around $57,330, down more than 13% in the past month. In recent weeks, Bitcoin has been hovering near support areas, with analysts suggesting that bears could target the $50,000 area.
JPMorgan revises down its net flow estimates
In their research note to investors, JPMorgan analysts said that liquidations are expected to dissipate significantly by the end of July. After that, Bitcoin and the broader cryptocurrency market could start to rise.
However, JPMorgan revised down its net flow estimates to $8 billion, expressing skepticism about the previous projection of $12 billion. In addition to BTC’s high price relative to its cost of production and compared to gold, the bank’s analysts also point to the decrease in foreign exchange reserves and broader selling pressure as the main reasons.
The decline in bitcoin reserves could be attributed to liquidations, mainly by Gemini or Mt. Gox creditors. Additionally, the German government’s massive dump of 50,000 BTC seized from a hacking site has sold most of it in recent weeks.
Data on chain watch The German government wallet currently contains about 4,925 BTC, worth approximately $283 million. When German police seized Movie2k’s BTC, it was worth about $2 billion and has since grown to $3.6 billion.