JPMorgan: The bottom may be in sight

Updated: 1 month

Nearly $2 trillion in value has evaporated from the crypto market in the past few months and it almost seems as if the prices of most cryptocurrencies can only fall further. However, according to the world’s largest investment bank, JPMorgan, we may soon finally see a bottom.

Is the crypto crash finally over?

According to an analyst at JPMorgan, Nikolaos Panigirtzoglou, they clearly see that there is deleveraging, but that this process is slowing down, reports Bloomberg. Deleveraging means that the amount of leverage positions, i.e. long or short derivatives positions, is decreasing significantly. Normally, a large amount of leverage positions, or a high open interest, means that prices can react violently upwards or downwards.

As traders have already been liquidated on a large scale and large companies that make extensive use of leverage, such as the Three Arrows Capital hedge fund that was recently completely liquidated, are flushed out of the market, open interest is falling. According to JPMorgan, the period of intense deleveraging may soon come to an end.

This may possibly coincide with the formation of a definitive bottom, according to Panigirtzoglou. In addition, venture capitalists continue to invest heavily in the crypto industry, keeping currently struggling companies afloat. These things combined could potentially lead to a bottom being imminent.

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The bitcoin bottom is coming

An analyst at Fundstrat, Mark Newton, also recently stated that he expects the bottom to be on the horizon.

“Bitcoin has had great success over the past 12 years making cyclical lows every 90 weeks. Lows should be just around the corner according to this cycle composition, and one should be alert in the month of July, looking to buy weakness for a healthy rebound, just as sentiment seems to be reaching a bearish tipping point.”

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