JPMorgan warns of bitcoin weakness as futures get liquidated – Economic Times

Posted: April 23, 2021 at 12:53 pm

The last few times Nikolaos Panigirtzoglou witnessed such negative price action in Bitcoin, buyers returned in time to prevent deeper slumps. This time, the JPMorgan Chase & Co. strategist is worried.

If the largest cryptocurrency isnt able to break back above $60,000 soon, momentum signals will collapse, strategists led by Panigirtzoglou wrote in a note Tuesday. Its likely traders including Commodity Trading Advisers (CTAs) and crypto funds were at least partly behind the buildup of long Bitcoin futures in recent weeks, as well as the unwind in past days, they said.

Over the past few days Bitcoin futures markets experienced a steep liquidation in a similar fashion to the middle of last February, middle of last January or the end of last November, the strategists said. Momentum signals will naturally decay from here for several months, given their still elevated level.

Whether we see a repeat of those previous episodes in the current conjuncture remains to be seen, the strategists said. The likelihood it will happen again seems lower because momentum decay seems more advanced and thus more difficult to reverse, they added. Flows into Bitcoin funds also appear weak, they said.

Bitcoin rose as high as $64,870 around the time of the Nasdaq listing of Coinbase Global Inc., but has retreated back below $60,000. The cryptocurrency is still up about 90% year-to-date.

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JPMorgan warns of bitcoin weakness as futures get liquidated - Economic Times

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