BTC Remains in Overbought Territory Despite Recent Correction, JPMorgan notes.
Despite a recent correction, JPMorgan highlights that Bitcoin remains in overbought territory. The momentum in the Bitcoin Spot ETF market reveals signs of slowing down, with a notable outflow of funds observed over the past 4 days.
Slowing Inflows and Notable Outflows
JPMorgan’s report highlights a significant slowdown in net inflows into Bitcoin Spot ETFs, accompanied by a significant outflow of funds in the past week. This trend questions the idea of a continuous and sustained net inflow into Bitcoin ETFs, which had fueled investor optimism of a significant price increase by the end of the year.
The cryptocurrency market experienced a sharp correction last week, with a more than 15% drop in the price of Bitcoin before bouncing back after the Federal Open Market Committee (FOMC) meeting on Wednesday. According to JPMorgan analysts, this correction may not be over yet, as the market’s position still shows an overbought level.
On Friday, the story seems to be proving JPMorgan right for now, with another correction in Bitcoin and the crypto market, BTC dropping below $63,000.
Halving and Continuing ETF Dynamics
The persistent optimism in the market regarding a substantial price increase by the end of the year is partly based on the anticipation that the demand for Bitcoin through Spot ETFs would continue to rise, combined with the halving event. However, analysts, led by Nikolaos Panigirtzoglou, signal that the reality of Bitcoin Spot ETF flows may not align with these expectations.
The halving event, which occurs every four years and halves miners’ rewards, is scheduled for mid-April. This event is often seen as a potential catalyst for an increase in Bitcoin prices, due to the decrease in new supply.
However, the JPMorgan report anticipates that profit-taking could continue as the halving event approaches, particularly in a context where the market still seems to be overbought despite the recent correction.
