Mar 26, 2024

JP Morgan Drops a Bombshell, Insists Bitcoin Remains Overbought Despite Correction

Brief Overview

  • There was a correction in the broader crypto market after Bitcoin plunged to less than $62k, decreasing by over 15% on Wednesday, according to CoinMarketCap.
  • Another major highlight is the increasing rate of outflows on spot BTC ETFs while inflows are starting to decline.
  • A report from JP Morgan, led by Nikolaos Panigirtzoglou, claims Bitcoin is overbought and will remain so until it halves in mid-April.

The crypto community could wait for much longer for Bitcoin’s overbought status to stabilize
as JP Morgan insists on continued profit-taking before halving.

Analysts led by Nikolaos Panigirtzoglou made the report about the current overbought status
of Bitcoin, including the increasing rate of outflows on spot Bitcoin ETFs.

JP Morgan Says Bitcoin Remains Overbought

After hitting a $73,000 all-time high earlier in March, the broader crypto market has been
undergoing a massive correction in the past week. However, there was a slight rebound after
the Federal Open Market Committee (FOMC) meeting on Wednesday. Nevertheless, JP
Morgan insists that the sell-off is not yet over and could continue until the Bitcoin halving,
coming up in less than 30 days.

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As first reported by CoinDesk and amplified by WatcherGuru, a key detail is that spot Bitcoin
ETF inflows reduced drastically while there’s a continued increase in the outflows. According
to CoinMarketCap, Bitcoin is still undergoing a correction, with the price down by over 4% in
the last 24 hours and more than 7% in the past seven days. The lowest price, according to
the price chart over the previous seven days, is $61.16k, with the average price at $68.1k.

Despite staying largely unprofitable in the last seven days, JP Morgan says Bitcoin sell-off
will not be hitting the brakes anytime soon. Apparently, the report from JP Morgan was
propagated by an analyst led by Nikolaos Panigirtzoglou.

“There remains considerable optimism in the market over the prospect for prices rising
significantly by year-end, with a significant component of that optimism arising from a view
that bitcoin demand via spot exchange-traded funds (ETFs) would continue at the same
pace even as the supply of bitcoin diminishes after the halving event,” JP Morgan said.

Spot Bitcoin ETF Outflows Increases While Inflows Decrease

Another important highlight of the report was the significant increase in spot Bitcoin ETF
outflows in the past week. JP Morgan claims that this might continue until the halving, which
is basically an event where miners’ rewards are cut in half. On the other hand, inflows have
drastically decreased due to traders taking profits from the market.

“This challenges the notion that the spot bitcoin ETF flow picture is going to be characterized
as a sustained one-way net inflow. In fact, as we approach the halving event, this
profit-taking is more likely to continue, particularly against a positioning backdrop that still
looks overbought despite the past week’s correction,” the report said.

At press time, data from IntoTheBlock shows Bitcoin to be largely bearish. There is about
3.52 million BTC bulls volume, which is in comparison to the 3.53 million bearish volume.
Furthermore, on-chain metrics such as the net network growth and the large transaction
volume remain bearish.

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